I'm looking at a possible cash purchase ($8k-15k) that needs $40-50k of work. The ARV conservatively would be $85k, probably more like $110k. I want it as a buy and hold. I have debt to income which would fund this outlay using conventional lending. I'm wondering what kinds of programs to look for with banks. Thanks in advance!
@Amanda Gust I would encourage you to start building relationships with bankers now, even before you have the property. I would encourage you to connect with other investors in your area by going to investor meet ups, and asking them which banks work well with investors on getting loans for single family residences. Then I would ask for the contact names of the specific bankers. Then I would go visit those bankers and let them know what your intentions of buying rental properties are and ask them what information they need from you to get started. This will help set up financing in advance of getting the property. Then I would do the same thing in order to get hard money lenders lined up for when you are ready to buy a deal. Then I would buy the property using hard money, rehab it, and then refinance it with the bank.
Thanks, Shiloh. I'm trying to avoid hard money loans; I've heard rumors of bank programs where they will loan a proportion of ARV as a construction loan that becomes a mortgage after it is done. I guess I was wondering if people here had experience with such things.
You can cash out under conventional loan with delayed financing exception but that won't be good option your appraisal value will be higher after rehab. The better option will be wait 6 month after rehab and cash out on current appraisal value .
Harjeet Bhatti, Lender in IL (#230554)
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