Updated about 1 month ago on . Most recent reply
Need funding to finish a rehab.
I have a bit of a unique situation. I have a single-family home that I have been renovating to use for a future rental property. This home is owned free and clear under my LLC . I have been using my own funds and labor on the project. I am at the point where I would like to use the equity from the property to hire someone to finish it for me to get my weekends back and to also buy my next property. The project is about 75% complete. This was a down to the studs (and a little beyond) renovation. new roof, new siding, new wiring, new plumbing new floor joists/subfloor, and has the ductwork for the HVAC unit completed. The problem I'm having with finding funding is I had a bankruptcy that closed in December of 2023 and most banks require a 3-5 year seasoning period after bankruptcy. I've tried several local banks that have told me basically that's the only thing that's keeping them from approving me. And the private money lenders I've reached out to who don't have a problem with the bankruptcy basically have told me I'm not asking for enough money, ($30,000 to finish the project) or I need to have the project complete to withdraw the full equity. Anyone had a similar situation? Or any ideas on lenders? I feel like I've exhausted all my options. I'm in south central Missouri. Any help is GREATLY appreciated.
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@Codey Collins Since the property is owned in an LLC, have you considered admitting a second member whose role is to serve as the guarantor?
More broadly, even if you secure a lender at this stage, it’s likely to be a private or alternative lender. That comes with significantly more expensive capital than traditional bank financing. It’s very difficult to get ahead if you’re consistently relying on high-cost debt.
There is a place for these lenders, particularly during the construction or development phase where leverage, speed, and flexibility can justify the cost. But once the project is stabilized, the goal should always be to transition into more cost-effective, permanent financing.
When I see investors entering real estate with credit challenges who are reliant on expensive funding sources, I question what the long-term strategy is. It often ends up feeling like a hamster wheel—constantly juggling high-cost debt without a clear path to more efficient capital.