What type of loan is right for me?

6 Replies

@Mark S. Roesel A few questions to better get an idea of the scenario.

- What value was the home purchased at and did you purchase with all cash?
- Do you have the cash to rehab the property or are looking for a lender for the rehab?
- Have you completed successful flips previously or is this your first one?
- Would you be selling this after rehab or renting? Think about another strategy in case your primary plan does not work out. 
- Any particular reason you are looking for a lender based on the ARV?

$10,000, all cash.

I have a little but I am looking for a lender for the rehab.

This is my first but I am not planning a flip I want to hold and Section 8 rent.

ARV because there is need for significant repair so not a lot of value as is.

@Mark S. Roesel As far as I know it will be tough finding a bank to give a loan on this type of property due its value and class. I would suggest trying to save up for the repairs yourself as this is your first rehab and the values are lower than usual that it should be feasible. Going through the rehab process will also help you understand the costs and learning curves along the way. Getting an HML in the current market on your first flip on this type of property could be a mistake due to this being your first rehab your costs will be higher than expected, contracts will be harder to come by and work due to the pandemic, the time to complete the rehab will be longer than expected causing stress with a potential HML. After completing the rehab depending on the ARV you may be able to get a loan from a local bank through conventional or commercial financing.

You would probably be best off seeking alternative means of funds such as credit lines as the loan size is probably too small for a lender. How much exactly are you expecting the rehab to cost?

@Mark S. Roesel I would recommend working your but off to save, use good credit cards, a good personal loan (lightsream or sofi) and friends and family to finance. Might be able to find a line of credit at a local bank if you have a relationship with them already. Hope this helps!