We are new multi family property investors and have our 1st opportunity that needs about $40K of rehab work. We are putting down 20% and financing the rest for the purchase. We’re trying to figure out the best way to find the $40K of rehab. We have, the funds from a 401(k) that will be rolled over. Is this the best way to fund the rehab work or should we borrow from our QRP? Or do something different? We appreciate your suggestions.
Borrowing from a different asset class is always risky. You can borrow up to 50k from your QRP. I would borrow from the QRP and then pay it back through the cash out refi. Good luck!
Borrowing from a 401K would work. What is a QRP? Welcome to BP @Elizabeth Williams
I think QRP is Qualified Retirement Plan. Another option may be to borrow some private money from family or friends. Literally just a private money loan deal but from a friend or family member who knows you and trusts you...Get an attorney to write up a simple interest-only loan deal and pay regular payments on the 40K until you sell. I do this sometimes for folks who have borrowed from me to acquire a property and need to rehab it after the fact. Also if you are a member of a local REI group, go to a meeting and tell people you need a small rehab loan you'll probably get someone who will come up to you after the meeting...