Hello 馃憢馃徑 Quick question my parents have blessed my wife and I with a house. The only thing is that we have to fix up the house. Which will cost $80k. Well I have a good friend that is willing to help me out with the money to fix it and then I have to apply for the HELOC loan bc a percentage has to be done before applying FIR IT. So when I receive the loan I will pay him back his money and his fees on top of that. Which is 20%-30%. The house is worth $160-$170. And on top of that I was trying to use some of the Equity to start getting into restate. Should I use this route or just mess with the bank and try to apply for a reconstruction loan??
Investor 路 Tampa, FL 路 Member since 2011 路 2k+ posts 路 3k+ votes
7y
After rereading your post above it may make more sense to sell the house. If the arv is 160k, after 80k in repairs plus all the fees and interest for the hard money, then more fees and interest for the refi, plus holding costs there will be very little equity left for you to pull out. This is assuming all the financing goes according to plan. I don鈥檛 know the repairs involved but 80k rehabs generally don鈥檛 go well for first timers.
Investor 路 Tampa, FL 路 Member since 2011 路 2k+ posts 路 3k+ votes
7y
20-30% is very expensive money. How good of a friend is he?
The cheapest money will be from the bank, you could do a cash out refi or a HELOC if the property is in okay shape. If not, it would still be cheaper to use a hard money lender to pull some cash out of the equity for the repairs, and then refinance it with a bank loan.
@Nick C. So the banks are telling me that the best route would be with a hard money lender bc it would be a hard and long process to just mess with the bank bc the house is not in good shape and it doesn鈥檛 have any value in it right now with it being gutted out
Investor 路 Tampa, FL 路 Member since 2011 路 2k+ posts 路 3k+ votes
7y
After rereading your post above it may make more sense to sell the house. If the arv is 160k, after 80k in repairs plus all the fees and interest for the hard money, then more fees and interest for the refi, plus holding costs there will be very little equity left for you to pull out. This is assuming all the financing goes according to plan. I don鈥檛 know the repairs involved but 80k rehabs generally don鈥檛 go well for first timers.