I have come across several potentially profitable flips and can either get a loan from the bank or have the seller finance the purchase however cannot find a way to get the money for the renovations? Hard money lenders want to do a loan on the purchase plus renovations, but with their loan to value ratio requirements there is still not enough?
Where else can I turn? Been diligently working on a private party loan...nothing yet.
Everyone I have heard of will want you to put your own skin in the game. Nobody is going to take your risk for theirs. I think friends and family may be the only option to get more money than the lenders are offering.
why wouldn't the private party do the loan? I'd guess your number s are not that great or you could get the capital. And in any case, what amount do you have in the deal? 50%? 80% I've known a few people to use credit cards... not that I advocate that, but the main issue for many people is access to capital. The interest paid for the flippers I've funded is small relative to their overall profit.
If you have a residential property, you could do HELOC (home equity line of credit). Or if it comes down to the bottom line, you could always resort to an equity partner (although that will cut into a portion of your profits).
hello Jeremy,ed reid here,there are lenders that will do 100% financing ,these are there guidelines ,you will need a 660 to 680 credit score,they will lend up to 100% of the after repair value up to 65% to break this down,lets say you have a property where the cost is 50,000to buy 30,000 to rehab,this total comes to 80,000,lets say that the house will appraise for 140,0000 after the property is rehabbed,65% of 140,000 is 91,000,you will be in good shape ,the other underwriting factors are that the lender will like for you to be solvent and will ask for bank statements or tax returns,hope this helps
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Thanks for all the advice. The problem with this house is that it's in an area where home values are low, but rental rates are high comparatively...student rentals in college town. Purchase price of $185k, $100k in repairs, rent monthly of $3400.
Recommend any lenders that do this?
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