hello bp community,
I am a long time browser and first time poster. The day after reading rich dad poor dad I began researching the world of real estate investing. Naturally I stumbled across this community and have been reading all the advice y'all have provided. I have now taken the plunge in securing my first property under contract and I would like to know what y'all think about financing, specifically, hard money or private lending in maryland/Baltimore area for a house flip. property details are as follows:
Purchase price: 60,000
House: 5 bedroom, 2 bath house
County Assessor information: land value: 68,000 building value: 110,000
Comps from realtor.com: $189,000
Please, someone give me advice as to which financing option is best and the likelihood of getting the financing.
Are there any investors on this site who are active in the baltimore area who are willing to provide financing? And/or partner or mentor me on my first deal?
Any advice is welcomed.
P.s. rehab cost: 40,000
If you have it under contract, put the address out there so you can get some quality assessment from people here. Is it in the city or county? Did you have a contractor give you a bid on the rehab? Are you in touch with a MD real estate agent who can give you accurate comps?
Thanks for replying. I should have said that I am waiting on the bank to sign the purchase docs so can't really give the address as of yet. The property is in baltimore city, in the Hamilton area. I am working with a contractor, but I am also a rehabber myself who has worked on 10 properties already. However I have never done an acquisition or a sale before. the initial estimate I received from my contractor was 40,000. I am working with a realtor as well and the comp I provided came from him as well as my research
Hmm, I thought I replied already. In general I would say it would have to be hard money, private lender or a partner. I don't think traditional lenders are making construction loans here right now.
You're putting this under contract without financing in place?
Hi, Ned. By traditional lenders I assume you mean institutional lenders, but I understand they are not all alike.
For example, I have been advised that it's kinda pointless for an individual to approach the big national banks like Bank of America and Wells Fargo for a single residential construction loan.
But regional banks, such as SunTrust and Chesapeake Bank of Maryland advertise construction loans at low interest rates, and representatives of both banks have personally told me about their programs. Also I hear mortgage lenders are open to lending for rehab projects. And I know of some rehabbers that have been able to secure a line of credit from institutional lenders or their projects.
Can you please expand upon your statement? Were you talking strictly about financing for Baltimore City projects? Personally I'd really like to find a construction loan that after project completion would morph into a mortgage loan for a rental. Am I dreaming?
I forgot to respond to the original poster. Tunji, you haven't said in which county in Maryland the five-bedroom house is located. Is it in Anne Arundel near the water? Baltimore County? Howard? That really matters, both to the ARV and to the likelihood of obtaining financing.
@Nancy Roth I am referring to financing within the city of Baltimore. Yes some of the large regional banks and smaller banks will do those kinds of loans outside the city. I am not saying it is impossible within the city but it is certainly tough.
With your rehab experience you have a better handle on costs that I would - Hamilton is one of those hot areas - you may find a private lender/partner/mentor if you post in the Marketplace, especially if the house has potential to appreciate. Once you have it under contract post everything you can about it, with pix.
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