Does 100% acquisition and rehab financing still exist?

Question

I haven’t taken down a project in a couple years and I used to have a list of lenders begged to finance my projects but now it seems those are much harder to find now.

If anyone can send me a contact etc I’d appreciate it.

Thanks

Marty Johnston · Answer

@Nick Versetto you're not wrong, capital markets the past 18-24 months have really tightened up. Pre-Covid especially, leverage was high and more or less shut down over night and many lenders sank back into their shells.

Markets are slowly improving again, but not where we were.

To answer your question, there are a number of lenders who offer 100% LTC, but most of those lenders are only in certain markets. I see you're in Chicago-land, which others here may have different experience then me, but I've found it very difficult to secure 100% LTC financing in IL. Particularly Cook County where many lenders reduce leverage as the laws there make it very difficult to foreclose.

Where I've seen highest leverage in IL is through a 90/100, and utilizing either:1. Cross-collateralization from othe properties to have 0.00% out of pocket (which is actually 'lower' leverage to the lender in these case)2. Utilizing unsecured debt for the remaining equity (10% plus closing costs + reserves) < this option looks at personal income, DTI, and credit (min score 700 to get best terms).3. Obtaining a cash flow advance against an existing portfolio/properties cash flow < this is a niche program that is an unsecured advance against your cashflows. No liens, no appraisals, no out of pocket costs, and no reporting to personal or business credit. Great option but requires existing stabilized cash flow (must be 'landlord' rental-type income, not business income such as sales) from your other SREO to make it happen.Feel free to DM me if interested in chatting more about this. 👍

Andrew Postell · Answer

@Nick Versetto yeah, 100% financing is available...up to 70% LTV for flips and 75% for buy-and-holds.  We usually find our best lenders through other investors in our market. try some local real estate meetup groups.  Meetup.com is a good resource for those but some of the groups will also post here on Bigger Pockets Marketplace too.  Even facebook might have some good local groups for you.  Get connected to other investors and see who they are using.

Jared Rine · Answer

@Nick Versetto..100% LTC financing does exist out there, but you're going to be held still to 65-75% ARV ranges depending on lenders, and it's not all stated income/no doc/etc.  The lenders who offer that type of financing want to look more at your financial situation, and if you haven't done any deals in last 3 years, it's tougher (generally speaking).  LTC only includes purchase + rehab, not any holding costs, interest, fees/closing costs/etc., which you would also need enough funds for. Just my $0.02  Reach out if you need.  Thanks,

Does 100% acquisition and rehab financing still exist?

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