Lending recommendations for quick purchase of new construction home for flip

Tyler, Texas
Private Lending & Conventional Mortgage Advice
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Lending recommendations for quick purchase of new construction home for flip

Rebekah L Bunn
Member since 2023 · 12 posts · 1 vote

Good day! I stumbled on a good opportunity and I wanted to ask advice about quick lending resources. A local builder overextended himself and he needs to unload a brand new SFH in order to finish his other projects, multi family houses that he intends to keep for rentals. He ran out of funds and was not able to pay the electric company to hook up the meter. That is the only thing left to complete the house. That will cost about $3000 for the utility install. There was a temporary connection for construction, this cost would be for the permanent installation. He built the house next to this one as well. That house was completed, listed on the mls for 624,000 and is currently under contract. The houses are the exact floor plan, design, interior, etc. the only difference is that the house @ 624 k has the meter installed and he completed a boat dock (approximately 35k to build). I am going to get the house without the meter under contract today for 335k. Both homes are waterfront properties on a boating, sporting and fishing lake in East Texas. Both lots are nearly an acre. I can wholesale the house for a quick profit but I would rather purchase it to resell. My husband is a real estate agent. We have plenty of comps that show that the house could sell for over 500k for a quick sale. I could get more on the retail market if I held on to it until summer, when the lake market in our area really takes off. My question is, what would be my best resource for quick lending? I will buy the house far below the ARV. It is completely finished except for the electrical utility hook up. We currently own our home and we are in the process of renovating a lake house that we plan to hold as a short term rental. We have always used conventional lending, but I would like to get established with a hard money or private lender that I can work with for future investments that can close quickly. I have really stepped up my lead generation and have several sellers who are ready to offload their properties at good prices but I am currently stuck in a place where I need financial resources to make quick offers. I am very conservative with purchase considerations and I feel that this would be a very low risk investment for a lender since there is no remodeling and the house will appraise for far above the price that I will pay for it. Any suggestions for lending resources would be greatly appreciated.

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Tom S.
Real Estate Investor · Burlington, VT · Member since 2010 · 2k+ posts · 1k+ votes
2y

@Rebekah L Bunn  So the house could be worth $624k, or at least $500k for a quick sale, and the contractor will let it go for $335k - only because of a $3k electric meter?  Even if the contractor is out of money, borrowing the $3k to finish the job and get top dollar would seem the way to go.

Nothing else is wrong with the house?

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  • Joe Dillamore
    Lender · Greenville, SC · Member since 2023 · 39 posts · 6 votes
    2y

    @Rebekah L Bunn Is your strategy to purchase and then try and re-sell within a few months? If so, this is bread-and-butter for hard money lenders. I founded a platform that helps investors find and compare hard money lenders. You can take a look or feel free to get in touch to discuss

    0Reply
  • Andrew Zamboroski
    Lender · Member since 2021 · 495 posts · 130 votes
    2y
    Quote from @Rebekah L Bunn:

    Good day! I stumbled on a good opportunity and I wanted to ask advice about quick lending resources. A local builder overextended himself and he needs to unload a brand new SFH in order to finish his other projects, multi family houses that he intends to keep for rentals. He ran out of funds and was not able to pay the electric company to hook up the meter. That is the only thing left to complete the house. That will cost about $3000 for the utility install. There was a temporary connection for construction, this cost would be for the permanent installation. He built the house next to this one as well. That house was completed, listed on the mls for 624,000 and is currently under contract. The houses are the exact floor plan, design, interior, etc. the only difference is that the house @ 624 k has the meter installed and he completed a boat dock (approximately 35k to build). I am going to get the house without the meter under contract today for 335k. Both homes are waterfront properties on a boating, sporting and fishing lake in East Texas. Both lots are nearly an acre. I can wholesale the house for a quick profit but I would rather purchase it to resell. My husband is a real estate agent. We have plenty of comps that show that the house could sell for over 500k for a quick sale. I could get more on the retail market if I held on to it until summer, when the lake market in our area really takes off. My question is, what would be my best resource for quick lending? I will buy the house far below the ARV. It is completely finished except for the electrical utility hook up. We currently own our home and we are in the process of renovating a lake house that we plan to hold as a short term rental. We have always used conventional lending, but I would like to get established with a hard money or private lender that I can work with for future investments that can close quickly. I have really stepped up my lead generation and have several sellers who are ready to offload their properties at good prices but I am currently stuck in a place where I need financial resources to make quick offers. I am very conservative with purchase considerations and I feel that this would be a very low risk investment for a lender since there is no remodeling and the house will appraise for far above the price that I will pay for it. Any suggestions for lending resources would be greatly appreciated.

    This should be an easy one for a hard money loan. The interest only payments and great leverage should allow you to turn it quickly and reap your desired profits. Happy to take a look at pricing myself if you want to connect!

    cheers!
    0Reply
  • Mike Klarman
    Specialist · NJ · Member since 2022 · 1k+ posts · 650 votes
    2y

    So, you'd want to get into a 12 month stabilized bridge.  They have no pre pay penalty.  That's your best way to do it, but you'd still need to show the funds needed to close on a 335k purchase which may be 75k+.  Doing it this way means closing on it yourself and keeping 75k - 90k tied up until you close on the sale.

    If you wholesale it, you do not have to close on it until you line up a buyer and you assign the contract at your price of 500k and you have a contract with the contractor for 335k.  However, if you're selling to someone getting financing then often times their lender will have caps to wholesale fees and seller assist.  So I'm not sure how that would affect this option but it might but this option costs $0 in capital to you - unless the contractor wants like a 10k deposit or something.

    0Reply
  • Rebekah L Bunn
    OP
    Member since 2023 · 12 posts · 1 vote
    2y

    Thank you!

    0Reply
  • Rebekah L Bunn
    OP
    Member since 2023 · 12 posts · 1 vote
    2y

    That is exactly what I would like to do.  I want to maximize my return on the investment. 

    0Reply
  • Rebekah L Bunn
    OP
    Member since 2023 · 12 posts · 1 vote
    2y

    Andrew I would love to connect!  Can you send me a message?  I am new to BiggerPockets Pro.  

    0Reply
  • Tom S.
    Real Estate Investor · Burlington, VT · Member since 2010 · 2k+ posts · 1k+ votes
    2y

    @Rebekah L Bunn  So the house could be worth $624k, or at least $500k for a quick sale, and the contractor will let it go for $335k - only because of a $3k electric meter?  Even if the contractor is out of money, borrowing the $3k to finish the job and get top dollar would seem the way to go.

    Nothing else is wrong with the house?

    3Reply
  • Erik EstradaBusiness Member
    Lender · Member since 2022 · 6k+ posts · 1k+ votes
    2y
    Quote from @Rebekah L Bunn:

    Good day! I stumbled on a good opportunity and I wanted to ask advice about quick lending resources. A local builder overextended himself and he needs to unload a brand new SFH in order to finish his other projects, multi family houses that he intends to keep for rentals. He ran out of funds and was not able to pay the electric company to hook up the meter. That is the only thing left to complete the house. That will cost about $3000 for the utility install. There was a temporary connection for construction, this cost would be for the permanent installation. He built the house next to this one as well. That house was completed, listed on the mls for 624,000 and is currently under contract. The houses are the exact floor plan, design, interior, etc. the only difference is that the house @ 624 k has the meter installed and he completed a boat dock (approximately 35k to build). I am going to get the house without the meter under contract today for 335k. Both homes are waterfront properties on a boating, sporting and fishing lake in East Texas. Both lots are nearly an acre. I can wholesale the house for a quick profit but I would rather purchase it to resell. My husband is a real estate agent. We have plenty of comps that show that the house could sell for over 500k for a quick sale. I could get more on the retail market if I held on to it until summer, when the lake market in our area really takes off. My question is, what would be my best resource for quick lending? I will buy the house far below the ARV. It is completely finished except for the electrical utility hook up. We currently own our home and we are in the process of renovating a lake house that we plan to hold as a short term rental. We have always used conventional lending, but I would like to get established with a hard money or private lender that I can work with for future investments that can close quickly. I have really stepped up my lead generation and have several sellers who are ready to offload their properties at good prices but I am currently stuck in a place where I need financial resources to make quick offers. I am very conservative with purchase considerations and I feel that this would be a very low risk investment for a lender since there is no remodeling and the house will appraise for far above the price that I will pay for it. Any suggestions for lending resources would be greatly appreciated.

    You will need to finance this with a bridge loan 

    [email protected]818-269-7983
    LuxePrivate Investments LLC 572 Reviews
    WebsiteView Page
    0Reply
  • Tanner Strand
    Specialist · AZ · Member since 2020 · 15 posts · 5 votes
    2y

    Hi @Rebekah L Bunn!

    I work with some of the best in the business. PM and I can hook you up with somebody that will be happy to help you price something out!

    0Reply
  • Rebekah L Bunn
    OP
    Member since 2023 · 12 posts · 1 vote
    2y
    Quote from @Tom S.:

    @Rebekah L Bunn  So the house could be worth $624k, or at least $500k for a quick sale, and the contractor will let it go for $335k - only because of a $3k electric meter?  Even if the contractor is out of money, borrowing the $3k to finish the job and get top dollar would seem the way to go.


    Nothing else is wrong with the house.   The builder is just leveraged to the point that he cannot afford to turn his n the power and he needs to liquidate the property.  

    Nothing else is wrong with the house?


    0Reply
  • Rebekah L Bunn
    OP
    Member since 2023 · 12 posts · 1 vote
    2y
    Quote from @Tanner Strand:

    Hi @Rebekah L Bunn!

    I work with some of the best in the business. PM and I can hook you up with somebody that will be happy to help you price something out!

    In Texas?
    0Reply
  • Rebekah L Bunn
    OP
    Member since 2023 · 12 posts · 1 vote
    2y
    Quote from @Erik Estrada:
    Quote from @Rebekah L Bunn:

    Good day! I stumbled on a good opportunity and I wanted to ask advice about quick lending resources. A local builder overextended himself and he needs to unload a brand new SFH in order to finish his other projects, multi family houses that he intends to keep for rentals. He ran out of funds and was not able to pay the electric company to hook up the meter. That is the only thing left to complete the house. That will cost about $3000 for the utility install. There was a temporary connection for construction, this cost would be for the permanent installation. He built the house next to this one as well. That house was completed, listed on the mls for 624,000 and is currently under contract. The houses are the exact floor plan, design, interior, etc. the only difference is that the house @ 624 k has the meter installed and he completed a boat dock (approximately 35k to build). I am going to get the house without the meter under contract today for 335k. Both homes are waterfront properties on a boating, sporting and fishing lake in East Texas. Both lots are nearly an acre. I can wholesale the house for a quick profit but I would rather purchase it to resell. My husband is a real estate agent. We have plenty of comps that show that the house could sell for over 500k for a quick sale. I could get more on the retail market if I held on to it until summer, when the lake market in our area really takes off. My question is, what would be my best resource for quick lending? I will buy the house far below the ARV. It is completely finished except for the electrical utility hook up. We currently own our home and we are in the process of renovating a lake house that we plan to hold as a short term rental. We have always used conventional lending, but I would like to get established with a hard money or private lender that I can work with for future investments that can close quickly. I have really stepped up my lead generation and have several sellers who are ready to offload their properties at good prices but I am currently stuck in a place where I need financial resources to make quick offers. I am very conservative with purchase considerations and I feel that this would be a very low risk investment for a lender since there is no remodeling and the house will appraise for far above the price that I will pay for it. Any suggestions for lending resources would be greatly appreciated.

    You will need to finance this with a bridge loan 

    Turn around time to fund a bridge loan?

    0Reply
  • Erik EstradaBusiness Member
    Lender · Member since 2022 · 6k+ posts · 1k+ votes
    2y
    Quote from @Rebekah L Bunn:
    Quote from @Erik Estrada:
    Quote from @Rebekah L Bunn:

    Good day! I stumbled on a good opportunity and I wanted to ask advice about quick lending resources. A local builder overextended himself and he needs to unload a brand new SFH in order to finish his other projects, multi family houses that he intends to keep for rentals. He ran out of funds and was not able to pay the electric company to hook up the meter. That is the only thing left to complete the house. That will cost about $3000 for the utility install. There was a temporary connection for construction, this cost would be for the permanent installation. He built the house next to this one as well. That house was completed, listed on the mls for 624,000 and is currently under contract. The houses are the exact floor plan, design, interior, etc. the only difference is that the house @ 624 k has the meter installed and he completed a boat dock (approximately 35k to build). I am going to get the house without the meter under contract today for 335k. Both homes are waterfront properties on a boating, sporting and fishing lake in East Texas. Both lots are nearly an acre. I can wholesale the house for a quick profit but I would rather purchase it to resell. My husband is a real estate agent. We have plenty of comps that show that the house could sell for over 500k for a quick sale. I could get more on the retail market if I held on to it until summer, when the lake market in our area really takes off. My question is, what would be my best resource for quick lending? I will buy the house far below the ARV. It is completely finished except for the electrical utility hook up. We currently own our home and we are in the process of renovating a lake house that we plan to hold as a short term rental. We have always used conventional lending, but I would like to get established with a hard money or private lender that I can work with for future investments that can close quickly. I have really stepped up my lead generation and have several sellers who are ready to offload their properties at good prices but I am currently stuck in a place where I need financial resources to make quick offers. I am very conservative with purchase considerations and I feel that this would be a very low risk investment for a lender since there is no remodeling and the house will appraise for far above the price that I will pay for it. Any suggestions for lending resources would be greatly appreciated.

    You will need to finance this with a bridge loan 

    Turn around time to fund a bridge loan?


     7 days 

    [email protected]818-269-7983
    LuxePrivate Investments LLC 572 Reviews
    WebsiteView Page
    0Reply
  • Myriam Keaton
    Member since 2022 · 12 posts · 4 votes
    2y
    Quote from @Tom S.:

    @Rebekah L Bunn  So the house could be worth $624k, or at least $500k for a quick sale, and the contractor will let it go for $335k - only because of a $3k electric meter?  Even if the contractor is out of money, borrowing the $3k to finish the job and get top dollar would seem the way to go.

    Nothing else is wrong with the house?


     That's exactly what I was thinking! That is a strange move from the contractor

    1Reply
  • Rebekah L Bunn
    OP
    Member since 2023 · 12 posts · 1 vote
    2y
    Quote from @Myriam Keaton:
    Quote from @Tom S.:

    @Rebekah L Bunn  So the house could be worth $624k, or at least $500k for a quick sale, and the contractor will let it go for $335k - only because of a $3k electric meter?  Even if the contractor is out of money, borrowing the $3k to finish the job and get top dollar would seem the way to go.

    Nothing else is wrong with the house?


     That's exactly what I was thinking! That is a strange move from the contractor


    0Reply
  • Rebekah L Bunn
    OP
    Member since 2023 · 12 posts · 1 vote
    2y

    The house is well built.  The builder overextended himself and has to liquidate this house in order to finish some multi-family homes that are in various stages of construction.  He narrowly escaped the property tax sale on his primary home a few weeks ago.  It’s not a matter of something wrong with the house, but with a distressed builder that has much more to lose of he does not liquidate this property.  The house that he built next to it did end up selling for 615 k after 37 days on market after I made this initial post.  By that time I already had this house under contract locked in a $332,500.  

    1Reply
  • Tom S.
    Real Estate Investor · Burlington, VT · Member since 2010 · 2k+ posts · 1k+ votes
    2y

    @Rebekah L Bunn That's good to hear you got it under contract at a great price - congrats!

    0Reply
  • Myriam Keaton
    Member since 2022 · 12 posts · 4 votes
    2y
    Quote from @Rebekah L Bunn:

    The house is well built.  The builder overextended himself and has to liquidate this house in order to finish some multi-family homes that are in various stages of construction.  He narrowly escaped the property tax sale on his primary home a few weeks ago.  It’s not a matter of something wrong with the house, but with a distressed builder that has much more to lose of he does not liquidate this property.  The house that he built next to it did end up selling for 615 k after 37 days on market after I made this initial post.  By that time I already had this house under contract locked in a $332,500.  


     That's awesome! I'm happy for you! :0)

    0Reply
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