I have looked around at hard money lenders in my area (PA) but no one seems to be lending under 50k. I just agreed to purchase a house for $13,500 that needs about $20,000 in renovation to make it habitable again. ARV for the home is around $45,000 with a $950/mo. rental potential. Closing is in 2 weeks, so any help would be greatly appreciated!
Credit cards, a personal loan, lending club, equity in an existing home, loan from a family member or colleague, loan against a retirement account, loan against a vehicle, or a commercial loan from a bank are all potential options. If the seller is eager to sell then they might also consider financing the property if you can provide a solid case for yourself.
@Alex Cannariato I'm not sure what your sources where for looking at the < 50k funding but @Jerry Padilla here on the BP forum has been one that speaks of the very thing you are looking for. At one point in time I was looking to do this type of funding but that deal didn't work due to the physical conditions of the property. It just wasn't worth it after we took a closer look. Anyway, send a message to Jerry to see if their costs meet with what you need.
the reason that lenders generaly do not go that low.. is you simply cannot make enough money on the file to make it worth the time or risk.
when I had my HML company it was my specialty but I had flat fee of 3 to 5k per file..
so its hard to advertise your charging 10 to 15 points.. but when you quantify that to dollars its just a few grand on these small deals.. and if your deal craters.. the HML put out 30k to make say 2 or 3 points that's not even 1k.. and the cost of foreclosure would be far above that.. and the HML would lose their butt on those deals.. I know been there done that..
So that is why.. friends and family is who you want.
in Oregon loans under 50k are subject to strict usury rules .. and that's why you can't get one here in this state..
@Jay Hinrichs nailed it (he always does!). I did a few sub 50K loans in the past. They didn't make any decent money even though the APR return was good. Friend and family may be your best bet. Good luck.