Beat way to fund a rehab?

5 Replies

There's a cash only house for sale for 14K. I've looked at it and it's in a good neighborhood. It's not livable and needs a total rehab. Assuming the numbers made sense/a good deal, what would be the best way to fund the rehab costs if I buy it? Thanks!
@Benjamin Pifer Find a local bank that does ARV loans (after renovation value). Works as such: Provide the bank with your estimated Reno costs and forced appreciation value. Purchase price + reno costs. Bank will then lend 80% of the property value once renovated. I use these on some larger projects that I don’t want to tie up a large sum of cash up front. You won’t get as much leverage of you did it all with cash then just refied, but you’ll still do well.

You can use the HomeStyle rehab loan for Investors if you have 20% down off the sum of purchase price plus rehab dollars needed. It is managed in that you must use a licensed GC to do the work, not self help. These loans are done on ARV after renovated value. Basically allowing small investors to get into the game using a 30 year term loan at todays interest rates rather than hard money lenders at high rates.

work two full time jobs and live on next to nothing

In a year you’ll have the money. 

If you had done this a year ago you would already have the cash

Yep, your own funds or a Heloc.  You could buy materials on cc or credit, net 30.  How much in Reno costs are you estimating?

I'd look at a lot of options before dealing with an ARV bank, contractors and draw schedules...

If the house is a find, grab it.  Wholetail it or lease option it to someone handy if you have to.  If you wait to figure it all out, it might be gone.