Real Estate Coach · Dallas, TX · Member since 2008 · 104 posts · 13 votes
I have a house I inherited in 2015 free & clear. I am trying to find a hard money lender who will lend on a property that is owner occupied. The current comps support an ARV of $210,000 to $225,000. I am looking for approximately $30,000 to $35,000 to cover all repairs/expenses. My intent is to have the repairs completed within 90 days and list it for sale. Again, I have 100% equity in the house.
I was asked why I don't get a home equity loan and the reasons are 1) My credit probably shows me to be a "ghost" since I have not had any sort of credit in the last 7-8 years and 2) I have worked for myself for the last decade and my income is usually in cash so, it would be impossible to prove any consistent income.
I never would have thought that getting a short term loan under my circumstances could be difficult to put together. Especially given the fact that I already own the house and don't owe anything on it.
@Jim Watkins 1) don’t advertise in a public forum that you don’t declare your income 2) go legit, start declaring 3) run your credit report and talk to lenders, you don’t know until you try
@Jim Watkins, HML don't lend to owner occupied. My suggestion to you would be to just off load it as is, or speak to a bank to see what kind of financing is available (much like you stated before with a HELOC). Also you may also want to put this on a different discussion. Good luck!
@Jim Watkins 1) don’t advertise in a public forum that you don’t declare your income 2) go legit, start declaring 3) run your credit report and talk to lenders, you don’t know until you try
Aside from the fact that HML will not lend to owner-occupied properties, they also don't tend to like small loan amounts. When you ask for <$100k, you've already eliminated half of the pool. Under $75k is another half. And then under $50k is maybe a couple. Will those couple of HMLs lend to someone with no or low credit? That's the other tough task.
Since you're going to need to move out anyway once you sell the house, perhaps move out earlier so that it's no longer owner-occupied? Then ask for a hard money loan over $50k.
The other option would be to find a private lender, or as someone else mentioned, sell it as-is.
I've run into the same issue. I need a small loan amount, and I can't find anyone who will do it. At this point, I plan to look for an individual lender rather than a company--someone local who makes his/her own rules and not a company. I plan to ask around at my local REI meetup next month. I'm sure there's an REI meetup near you as well.