Financing for repairs

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Daniel Harvey
Member since 2019 · 1 post · 1 vote
3y

It only took my heloc 3 days to get approval back in April of last year with BB&T/Truist.  They did the appraisal over the internet from Zillow and other websites to verify the property value and made it really quick. 

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  • Mark Navarrete
    Member since 2019 · 61 posts · 23 votes
    3y

    Have you looked into private/hard money lenders?

    0Reply
  • Erik EstradaBusiness Member
    Lender · Member since 2022 · 6k+ posts · 1k+ votes
    3y
    Quote from @Chris Potthast:

    The repairs have far exceeded our budget. HELOC application is in progress but a VERY long lead time. Looking for financing to keep repairs moving forward. Any suggestions?


     A hard money loan could work but this highly depends on your exit strategy. Is your plan to sell this property or keep it as a long term rental? 

    [email protected]818-269-7983
    LuxePrivate Investments LLC 572 Reviews
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  • Eliott Elias
    Investor · Austin, TX · Member since 2021 · 9k+ posts · 5k+ votes
    3y

    Is the house paid off or is there debt? I would take hard money, could be tricky if someone has a first position lien 

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  • Chris Potthast
    OP
    Member since 2022 · 5 posts · 1 vote
    3y
    Quote from @Erik Estrada:
    Quote from @Chris Potthast:

    The repairs have far exceeded our budget. HELOC application is in progress but a VERY long lead time. Looking for financing to keep repairs moving forward. Any suggestions?


     A hard money loan could work but this highly depends on your exit strategy. Is your plan to sell this property or keep it as a long term rental? 


     Hi Erik. We plan to sell ASAP when repairs are finished. There is an outstanding hard money loan on the property too. Do you know a private or hard money lender who will work with us?

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  • Erik EstradaBusiness Member
    Lender · Member since 2022 · 6k+ posts · 1k+ votes
    3y
    Quote from @Chris Potthast:
    Quote from @Erik Estrada:
    Quote from @Chris Potthast:

    The repairs have far exceeded our budget. HELOC application is in progress but a VERY long lead time. Looking for financing to keep repairs moving forward. Any suggestions?


     A hard money loan could work but this highly depends on your exit strategy. Is your plan to sell this property or keep it as a long term rental? 


     Hi Erik. We plan to sell ASAP when repairs are finished. There is an outstanding hard money loan on the property too. Do you know a private or hard money lender who will work with us?


    It depends on what your current LTV is. Most will not go over 75%. If you have another property you might want to look into taking on a second position hard money loan, make the repairs and then sell it, pay off the second on your other property.

    [email protected]818-269-7983
    LuxePrivate Investments LLC 572 Reviews
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  • Bob ReinhardBusiness Member
    Lender · Patterson, NY · Member since 2017 · 488 posts · 186 votes
    3y
    Likely, if at all, private money. No lender wants to be in a 2d position on the property.

    Much success.
    [email protected]914-861-5501
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  • Chris Potthast
    OP
    Member since 2022 · 5 posts · 1 vote
    3y
    Quote from @Bob Reinhard:
    Likely, if at all, private money. No lender wants to be in a 2d position on the property.

    Much success.

    Hi Bob. Yep. That's the challenge and why I was reaching out for a possible solution. The waiting period for the HELOC approval means additional carrying costs so we are trying to be proactive to find a solution where we keep the renovations moving forward. Yes, proactive would have been to be accurate with the estimate of repairs and have the HELOC in place but that is hindsight at this point. Lesson learned.

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  • Chris Potthast
    OP
    Member since 2022 · 5 posts · 1 vote
    3y
    Quote from @Mark Navarrete:

    Have you looked into private/hard money lenders?


     Yes, we have looked into private/hard money lenders. The challenge is finding a lender willing to take on a second lien position. If you know a lender open to that, I'm open to discussing with them.

    0Reply
  • Bob ReinhardBusiness Member
    Lender · Patterson, NY · Member since 2017 · 488 posts · 186 votes
    3y
    It is one of those things that B.P.  productions, sadly, seems to 'gloss over'
    [email protected]914-861-5501
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  • Matthew CrivelliBusiness Member
    Lender · MA · Member since 2021 · 1k+ posts · 1k+ votes
    3y

    Rehab loan from a HML might work. @Chris Potthast

    [email protected]413-348-8346
    Freedom Capital Funding, LLC523 Reviews
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  • Stephanie P.Pro Member
    Washington, DC Mortgage Lender/Broker · Member since 2016 · 4k+ posts · 2k+ votes
    3y
    Quote from @Chris Potthast:

    The repairs have far exceeded our budget. HELOC application is in progress but a VERY long lead time. Looking for financing to keep repairs moving forward. Any suggestions?


     Hard money as others have said.  You'll have to get them to payoff the first and then provide an accurate and reasonable scope of work to get the repairs paid out in draws.

    0Reply
  • Jack Mawer
    Lender · Member since 2022 · 338 posts · 374 votes
    3y

    I would look into private money 

    0Reply
  • Steve Vaughan
    Rental Property Investor · East Wenatchee, WA · Member since 2014 · 10k+ posts · 16k+ votes
    3y

    Depending on how much you need, materials can be purchased with credit cards of course.  Free and clear vehicles can get title loans from your bank.

    Both suggestions make me vomit a little.  Fix and flip can suck, but at least transaction costs are high and taxes are high too if you make a profit. 

    0Reply
  • Dave McIntyre
    Investor · Northern NJ · Member since 2022 · 142 posts · 10 votes
    3y

    Hi Chris,

    One option that might work is to get unsecured working capital funding. It's out there and available from lenders who don't have as strict criteria as conventional banks.

    Best,

    Dave

    0Reply
  • Daniel Harvey
    Member since 2019 · 1 post · 1 vote
    3y

    It only took my heloc 3 days to get approval back in April of last year with BB&T/Truist.  They did the appraisal over the internet from Zillow and other websites to verify the property value and made it really quick. 

    1Reply
  • Chris Potthast
    OP
    Member since 2022 · 5 posts · 1 vote
    3y

    Thanks for all the feedback and the heads up about BB&T/Truist. I actually had a HELOC application at Bank of America but they projected a turn-around time of up to 4 months. After meeting someone at a networking event in Dallas, I was referred to Comerica where I worked with a team in California who got everything done in about 2 weeks. We were then able to continue the work on the property with the available funds.

    1Reply
  • Bruce Lynn
    Real Estate Broker · Coppell, TX · Member since 2011 · 5k+ posts · 4k+ votes
    3y

    Can you get personal loan from a local credit union?

    Probably cheaper than hard money.

    Should be quick turnaround.

    Lots of lenders no longer doing HELOC. As you say, many have 45-60 day lead time.

    Would appreciate the referral to Comerica if you want to DM me.

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