Personal Loan to finance rehab?

Question

I have a property under contract that I offered cash for. It looks like it will need more rehab than expected so I will need some additional funds (30k max probably less) for that. I can go the hard money lender route but then I would need to purchase the property as well through them which means I would probably need to renegotiate the contract. I've heard people mention credit cards but I'm not a fan of the interest rates.

I did, however, look up personal loans through companies like LendingClub that can do the lower amount I would need and the interest looks to be in the Hard Money range. Is there any reason I shouldn't go that route?

Diana Muresan · Answer

@Jeff Mills no need for HML when you can walk the red carpet of conventional FannieMae HomeStyle renovation loan for  investment properties. Only 15% Downpayment, it includes the renovation costs and you can roll in the mortgage payments into the loan during the repairs. You can sell or refi after as no pre-pay allowed on conventional market. PM if you need further assistance

Kenneth Garrett · Answer

@Jeff Mills

I’m not a fan of funding with a credit card either, but if you have the ability to apply for a new credit card (good Credit) many cards are zero percent interest for the first 12-18 months.  Then it would be worth it as long as you pay them off in that zero percent interest time frame.

Good Luck.

Caleb Jordan · Answer

It does not hurt to ask seller if they would take HML. You could also look into delayed financing with a HML then buy house in cash and pull out a percentage of the purchase price after you buy it, let's say 80%, then use that cash to fix it up.

If you find a personel loan with agreeable terms and enough time to pay it back that could work.

Tim Johnson · Answer

Check the length of terms with them, some only do 3-6 months terms, so that means you need to fix it, sell it in that amount of time.  Sometimes that can be difficult during this time of year

Anna L. · Answer

@Jeff Mills, here are few options:

- borough from 401K (up to 50% or $50k)

- use existing credit card 0% BT offer (for personal CC - I don’t go over 30% of available credit, for some business cards, that don’t report on my personal credit I do 100%). You may need to do a few BT to get to $30k

- apply for fee new cards with sign up bonus and 0% interest promo that way, you can fund most of your rehab and reward yourself with free travel after you complete your project

- get HELOC if you have enough equity in your house

- re-finance your car if it’s paid off and pay it off after the project is done (Penfed sends you a check for a car)

- apply for Business Loan if you have business

Anna L. · Answer

@Anna L. Hahaha, just noticed that my borrow was somehow autocorrected to borough

Diana Muresan · Answer

Hi Charlotte, yes, let’s touch base on the phone. I am based in Chicago on CST, where are you located? I am available before noon on Thursday and Friday and anytime next week

Charlotte Harrison · Answer

@Diana Muresan

Hi Diana,

I would love to speak with you to see if you could help me figure out a strategy with regard to obtaining a multi unit property. It would mean the world to me to be able to speak to you.

Diana Muresan · Answer

@Jeff Mills

It can be done as a refi or purchase but not just for renovation costs, but for the whole loan

Jeff Mills · Answer

@Diana Muresan thanks for your input. Looking up the HomeStyle loan it seems that it is for purchase and renovation. Could it be used just for the renovation costs?

Personal Loan to finance rehab?

Most Popular Reply