Flipper/Rehabber · Cincinnati, OH · Member since 2019 · 7 posts · 1 vote
I have a property that I own outright that I'm exploring the idea of getting a hard money loan on to finish updating it and rent it out before I do a cash-out refinance in about 6 months or so. Is this a scenario that would be attractive to a hard money lender?
@Joel Thompson no intent to live in it at all. My thoughts were to use a Hard/Private loan to rehab the property and use my own cash to pay down debt to maximize my score to prepare for the refinance.
@Chris Robinson no one should give you a hard time for asking FAQs. Congrats on getting this far with your own cash!
Since its your first time using hard money, I'd recommend getting a HML to do the rehab on this property, getting a tenant back in, then refi out of the HML and get the cash you need at that time. This way, you won't be paying the HML rate for the funds used to finance the other purchase and rehab. Plus, your lender will see this first success and may offer a better rate on the next loan.
@Chris Robinson I have done this before. It’s actually a great option for a hard money lender because they get first lien on the property without coming up with the acquisition costs.