Can you get hard money and some cash at close?

Question

I thought I saw a post here that basically talked about using hard money at 70% ARV. But if you estimate that your deal only requires 64% or 67% ARV that you may be able to get the difference at close and pay it back when you sell?

Reason I ask is that I found a property where the buy and fix will really only be about 64% ARV. I've identified a hard money lender that will do 70% of the ARV. My contractor needs a 1/3 to start the project which I will pay when his guys show up and finish the day. If I could get that % difference at close it would make things easier.

Can anyone shed some light on whether hard money lenders do this or not?

Thanks.

Ivan

Curt Davis · Answer

Ivan,  The way you get around this is to make your rehab figure just high enough to get the full HM loan possible. HM lenders do not want to lend out anymore money then thay have to so you need to be creative. Make your numbers work in your favor.

Steve L. · Answer

I don't think any HML will do this.  If you have no room in your budget and cannot pay afford to prepay your contractor go find a money partner.  Every flip we do, there is something unexpected that happens, this usually costs money.

Most HML these days want 10% in the deal.  So if you are at 64% they will make you put in 10%.  Have you factored in their points and monthly payments?