Need financing to rehab
My family have a property that needs rehab badly. Want to rehab and rent it out since the family has pretty much abandoned it as we all got older. How can I get financing to do it?
@Tanya Potts I recommend a couple things to start...
1.) you need to understand if money is owed on the property and if so, how much?
2.) you need to understand what the property is currently worth on the open market, and how much it may be worth if you did the rehab.
3.) once you have an estimate of these numbers, connect with lenders who can offer a HELOC (home equity line of credit).
4.) this part gets tricky because it has to make sense at this point... but... if the amount you can get on a HELOC allows you to do enough repairs/renovation to warrant a high-enough ARV (after-repair value) it may make sense to take the HELOC to pay for the repairs and then get the property appraised after. Based on that new appraised value, you may be able to cash out refinance with a lender and pay off the HELOC. It makes a lot of sense to draft a plan and run it by experienced investors and lenders before commiting to this. You really want a lender to agree to your plan and refinancing when you get it fixed up before committing.
All of this is super speculative, and it may not be a realistic option for you, but this is a potential path to look into.
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#3 BRRRR - Buy, Rehab, Rent, Refinance, Repeat Contributor
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Hard money or find an investor you can give a portion of the profits to to invest in the deal
@Tanya Potts, not only do you need to complete what Jeff has advised, but you also need to confirm who's name is on the title. Was the property originally owned by a relative or parent/grandparent, if so did it properly go through probate? I've heard many situations of families trying to gain ownership and fight for property. Your situation may be entirely different, neverthless, you need to confirm. Furthermore, as a licensed real estate agent, I'd be more than happy to pull comps for you to evaluate the ARV of the home. I'll send you a separate pm. Hope this helps!
Are you hoping to live in this as a primary? An FHA 203k can be a great rehab option. Most mortgage lenders are able to do these. I'd reach out to a local bank/lender.
Hi @Tanya Potts! Tyler's advice is a great place to start. There is just more information needed to know what loan you qualify for and then compare rates and terms to make sure you are getting the best deal. A conventional option for owner occupied properties tend to have the lowest rate. If you are willing to pay more for the loan, a hard money lender could be a good option. You will typically need at least 20% for purchase but some lenders can do 100% of rehab if the property is paid off.
You can search BiggerPockets Hard Money Lending Directory here to explore options.
I do know that no money is owed. We just pay the yearly taxes. The county has the land valued at 62,700, house at 27,400 with a total value of 90,100. I am not sure about all the numbers or the process but I am the only person that is willing to figure this out. Every one else wants me to just sell it.
I do know that no money is owed. We just pay the yearly taxes. The county has the land valued at 62,700, house at 27,400 with a total value of 90,100. I am not sure about all the numbers and the process you laid out but I am willing to try. Every one else just want me to sell it.
It was owned by my grandparents and put into a trust. The whole lot is broken into 3 parcels and we are down to this last one. I would truly appreciate the help
Quote from @Tanya Potts:
Quote from @Madeline Malinovsky:
Are you hoping to live in this as a primary? An FHA 203k can be a great rehab option. Most mortgage lenders are able to do these. I'd reach out to a local bank/lender.
I am not looking to live there. I live in VA now.
Quote from @Michael Dumler:
@Tanya Potts, not only do you need to complete what Jeff has advised, but you also need to confirm who's name is on the title. Was the property originally owned by a relative or parent/grandparent, if so did it properly go through probate? I've heard many situations of families trying to gain ownership and fight for property. Your situation may be entirely different, neverthless, you need to confirm. Furthermore, as a licensed real estate agent, I'd be more than happy to pull comps for you to evaluate the ARV of the home. I'll send you a separate pm. Hope this helps!
Thank you. I would greatly appreciate the help
hard money! def find a good lender. i have used a great one and happy to share more details
@Tanya Potts
Hard money is a great option for rehab projects
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