100% Financing — Too Good to Be True?

[Brandon Lee]

I’ve seen more lenders offering higher leverage lately. Curious — has anyone here closed a deal with 100% financing, and what was your experience?

[Ryan Stuckey]

100% financing on both purchase price and rehab cost? YES, it's not uncommon in some areas of the country with certain regional hard money lenders offering it with various conditions (I am part of one). You will have more chance of obtaining it if you have rehab experience and good credit. And this 100% LTC financing will be capped at 65-75% of ARV as risk mitigation. That means you need a solidly profitable deal to get this level of financing.

100% financing on purchase price, rehab cost, AND closing costs? NO, this is not available outside of a close personal relationship (i.e. private lender in your local area). The 100% purchase and rehab lenders expect the borrower to have the liquidity to cover the closing costs as well as having some excess liquidity beyond these costs to be able to run the project well (i.e. to contribute some investment into the project and to have skin in the game).