Looking for Short term loan - closing ASAP OR Oct 18

4 Replies

Hello, I'm trying to buy this property in Baltimore I was wondering if anyone on BP could do a short term loan for the purchase and after we renovate and rent the property we cash-out/ refi into a 30-year note to repay this loan.

The rents in the area are about $1000-1300 monthly and the property is on a good block in Baltimore

purchase price is $25k

ARV $110k

I am looking for a private money short term loan to close by Oct 18

Danielle Gaynor, REALTOR/Investor

Thanks in advance for all help!!

You can spend a lot of time trying to find a private lender, or you can just go hard money on the deal and close it? If it were me, I would be calling all the hard money in the area or lenders that regularly work with investors, they will have hard money. 

I hope this helps?

those small of loans are tough.. there is no money in them for the lender and the risk / reward does not usually work.

this is almost credit card money frankly.. 

also be cautious of those contacting you saying they are private lenders and can do the deal but you need some upfront money those are frauds and you will lose the money.

@Danielle Gaynor

Hi Danielle,

I think that both @Kevin Romines and @Jay Hinrichs provided some solid insight.

One thing that you will want to look out for is the specific financing guidelines of whichever lender you end up working with. For example, their guidelines might state something like 'The lesser of 70% of ARV and 90% of Project Costs'.

We can work with your scenario, and I'll make some assumptions about the rehab cost, although you can plug your own actual rehab numbers in.

Purchase Price: 25k

Rehab: 50k

ARV: 110k

At this level, 90% of LTC is $67.5k

70% of ARV is $77k

In this situation, our hypothetical lender would fund $67.5k.

Anything below 100k in loan amount tends to become difficult to find financing for, and you will want to be sure that the lender is still able to fund even if the ARV doesn't come back at the price you think it will.

It might be worth it to talk to some investors who have done similar-sized deals in your area, and see which route they have taken to procure financing.

Hope this helps,

Michael