Funding for Project

[John Hamilton]

HI All,

I met a person on BP that is a lender. Id rather not advertise. I'm looking for any feedback.

Would you accept this loan?

They are willing to loan $150K for SFH purchase and rehab. Term is 12 months @ 4%. The loan is a non-collateral loan. It will cost me $1,250 upfront, with $750 of that refundable if I don't qualify. Monthly payments ($12+K monthly payments) alone is something I can't afford to pay. However, I know that if I find the right deal (been looking), I can make a decent profit.

3 months of $13K payments takes me down to $111,000 to cover the purchase and rehab costs. If I go longer than 5 months, I feel I will be in the red and underwater on this deal.

Should I get 2 places for $55K each? (once again to cover the purchase and rehab)

Any thoughts?

[Tom S.]

@John Hamilton Personally, I think those are horrible terms.  $12,000 per month for payments??  Upfront fees?  It's also very strange that it would be a non-collateral loan.

I would simply look to small, local banks or even HML's for better lending options for a purchase + rehab. Definitely keep shopping.

Good luck!

- Tom