How can I do a rehab if I am getting seller financing?

Question

Hello everyone!  I have hit a road block and thought to come here right away for some answers.  I am from Wisconsin, and hoping to lock up a fix and hold property in Mesa, AZ.  I had thought about proposing seller financing to a seller.  I had thought this could be a win-win situation for both me and seller, however, I am not sure how I should plan on getting the funds to complete a rehab of the property.  My question is, what are my options for funding a rehab when I am getting a seller financed deal.  I would love some help on this, thank you!

Chris Seveney · Answer

@Garrett Jennings

How would you have gotten the funds if you didn’t do seller financing? You can still go that route.

Eliott Elias · Answer

Work the deal with a private lender or partner who will fund you the down payment and rehab costs.

David Ramirez · Answer

Hey Garrett,

I would try to get the monthly payment on that seller finance loan lower than 50% of the gross monthly rent that way you can get private or hard money on top of the loan and still be cash-flowing after renovating the property. Since it would not make sense to refinance after renovating I would ask around for money and give out a little bit of equity or set up a repayment plan due in a span of 5 years where it would make sense to refinance.

Hope this was helpful. Good luck!

David