Advice finding first rental Funding!

3 Replies

Hello out there no family!

Looking for advice on the best way to fund my first rental deal.

Property is currently owend by a relative. They have moved out of country and are looking to unload the sfr as soon as possible. I'm a broker so naturally they contacted me to make this happen.

I would really like to purchase the property myself as the area is swiftly up and coming and they offered it to me for %20 under what I feel the resale value is.

My problem is :

• that the loan amount would be to small making this a high priced loan(no traditional lender wants to touch it)

• creative is out as they want to cash out as quickly as possible

• I don't have the liquid capital to purchase outright

Any suggestions would be greatly appreciated!

@Adam Reyher sorry, was totally distracted here when replied earlier. So the whole point of Hard Money is that it can close quickly AND lend based on the AFTER REPAIR VALUE (ARV) of the home. So if a hard money lender will lend you 75% of the ARV...and your relative is selling it to you at 80%...then you just need 5% down + closing costs to buy that property. Now, I would also encourage you to get prequalified for the REFINANCE step...because that HML will be a short term, high interest rate loan. So even if you do have 5%, you will want to make sure you have an exit strategy to that loan. Hope this all makes sense!

Most small loan limits are $50-$100K. Hopefully it is at least those amounts. Some lenders don't have any limits on certain loan types? Depending on the loan type you are looking for, If conventional, I would have your relative quit claim you to title and then immediately do a rate and term refinance. You can do this with zero seasoning requirements up to 75% of the appraised value.

I hope this helps?

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