How To Secure Rehab Funding When Buying Owner Finance Deals?
Hello,
I will be acquiring a 2 unit building using owner finance soon here in IL. Here are the details.
PP: 147k
Down Payment: $0
Monthly Payment: $1,200
Term: 36 Months
Interest: 0%
Balloon Payment $103,000.
The repairs would cost around $20,000 to update it. I plan on doing some updates since it is already rented out ($2,100) with tenants, however, I don't want to come out of pocket to pay the repairs. I eventually plan to do a cash out refinance and recoup all of my money and pay off the seller. The ARV is well over 250k so I should be able to do a refinance at the end of the term. I also plan on using a Note servicer.
My question is, how do I secure funding for these kinds of deals, where I don't need the cash for a down payment or for the PP but instead I need the rehab money? Do I look for hard money lenders/private money lenders? How should I approach this and other deals similar to this moving forward? Also in the event where I have to put down money for future deals, which I had to come out of pocket to do so in the past, How do I find funding to pay for the down payment AND the repairs?
My goal is to use OPM to create a nice size portfolio. I wholesale many deals per month but want to take them down for myself.
Thanks for any input.