Making Monthly Payment During Rehab
Hi all,
This one is for the flippers out there. Buying a property that needs 4-6 months of rehab, with a mortgage or hard money loan that requires monthly payments, how would you make the payments on the loan while the house is under construction or on the market waiting to be sold? Do you generally have enough saved up before hand to make the payments while the property's cash-flow is idle? Are there different ways to structure hard money loans?
Most Popular Reply
I have no experience on flips, but have renovated a couple properties. I planned accordingly prior to purchase. One of the things I did was create extra income by selling things on Ebay and saving more. As Fred mentioned, make sure you have reserves.
Also, speak with the hard money lender and get all the facts straight. Have them break down the costs for you, ask a lot of questions. People might assume that hard money loans are a quick/inexpensive solution to get started, but that's not always the case.