If a rehabbed was not selling as fast as one hoped, and they decided to rent it out instead, how would the investor pay the lender the original loan amount - if they do not have the funds they would from an outright sale?
Refinance into a conventinal Loan? I think this is what you are asking.
How much value do you in the house? Can you refinance you money out, pay off the investor and use it as a rental?
This was just me trying to understand a back up solution in case I don't sell a flip. So you would refinance into a conventional loan, use the rental income to pay the monthly amount, then cash flow is whatever is left? If so, awesome. That's what I needed. Thank you for your help guys.
@Justin Foley I applaud your thinking. Anytime I am going to make an investment (whether real estate or otherwise) I always ask myself "what if"..... Having a backup plan and understanding that your current plans may not work out can make all the difference between success and failure.
When we hard money 'lend' there is a 'bonus' (within the confines or usury) added to the extra months required to finalize a sale. Maybe you could approach & add that as an enticing post-addendum to the current 'financial' agreement.
We 'post-collected' $23,000 in interest over a similar 'extended' period on a 'flip' property we paid $20k for at a Tax Lien auction. It eventually sold for $50,000, after they lived in it & completed the rehab so I guess they didn't feel a thing.
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