Updated over 1 year ago on . Most recent reply
Iso Rehab, Refinance Funding
I seek financing options for the first and third Rs of my first BRRRR project.
I have a 2BR house under contract, and have funds available to close (about $32K).
Of course, the house needs the first R - Rehab.
Is there a lender here who would lend $20K-$25K against a free and clear property for rehab that would raise its value from $34K to $72K (per an appraisal in January)? (My credit score is sub-600; I know that makes it harder.)
After rehab, I anticipate renting it for $1622/month through our county's Section 8 program. After all expenses, I anticipate a monthly NOI of $1275.
That brings us to the third R - Refinance.
Is there a lender here who would make a DSCR loan based on a monthly NOI of $1275? If so, for what amount, and on what terms - especially, with what seasoning requirement? I would need to pay myself back the funds to purchase ($32K) and pay off the rehab financing ($20K-$25K). I would WANT to borrow as much as the property would support, to better position myself for my next deal - I am working toward a $3 million portfolio.