are there home improvement loans?

Question

Need about estimate of 10K to finish  my reno.  Can you get a home improveement loan on a house with no first mortgage?   Even  for a non owner occupied?  How do you find private lenders?

Todd Hoffman · Answer

Is there a reason you do not want to or you can not take out a traditional first mortgage (or HELOC) on what I assume is a free and clear investment property? I ask because it is often much cheaper than using hard or private money.

My understanding is that many banks and credit unions will still provide first position liens on investment properties (as long as it and the borrower meet the criteria).

This post is only my personal opinion. I make no claims, promises or guarantees about the accuracy, completeness, or adequacy of the information. None of the content should be considered a binding offer or agreement. Any terms or rates mentioned are subject change without notice. I am not an attorney nor am I a legal or tax professional. You should consider seeking professional legal, tax and other professional advice before acting.

J Scott · Answer

If you own it free and clear, you should have some options.  A hard money lender will likely lend at 50% current ARV (though at a high rate); a private lender will likely lend in that range as well (at a lower rate).

Private lenders are just people with money who agree to loan some of that money to you.  So, to find private lenders you need to do two things:

1. Find people with money;

2. Convince them to loan some of it to you.

Sorry, didn't mean for that to come off as obnoxious...  :)

In all seriousness, you want to start asking your professional friends (high income earners such as doctors, lawyers, engineers, etc) and your older friends (those who might have retirement funds they aren't yet using), and see who is looking for a better return on the cash they have sitting around.

Then pitch your *low-risk* opportunity (explain how it's secured by real estate worth a lot more than what you're borrowing) and see if they're interested.  It's really that simple (in theory, at least).