Need more cash to finish rehab

San Antonio, Texas
Creative Real Estate Financing
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Need more cash to finish rehab

Johana Villamil
Investor · San Antonio · Member since 2024 · 22 posts · 13 votes

Hello my fellow Big Pocketers,  I need some help! I am currently in the middle of a rehab, things won't left with my General Contractor and I need to take action. I have spoken with him several times already but it's like talking to the wall. I am 6 months in and he just prolongs my project. Sometimes I go days even weeks without work and as we all know time is money in this business! I already had another GC take a look at my property and he has done good quick work for other investors in the area that I know personally. I want to move forward with him but it will increase my rehab budget. I am using hard money and they are not willing to increase my rehab budget. I need recommendations as how I can go about getting myself some more cash. Has anyone ever been in this situation and needed more cash to finish their project? What would I be able to qualify for in this situation? 

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Adam BartomeoBusiness Member
Real Estate Broker · Cape Coral, FL · Member since 2015 · 2k+ posts · 1k+ votes
2y

I assume that you are looking for creative ways to fund this. You can get cash from your credit cards. I posted on BP about 10 years ago about using credit cards to buy houses with 0% interest. Its all true and ligit. You can do a balance transfer right into your bank account, they normally charge you a 2% -3% upfront fee and give you 9 - 12 months 0%. I used to do it all the time but haven't had a need in the last 3 -4 years.

[email protected]239-339-3969
Bartomeo Property Management4.7150 Reviews
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  • Brandon Croucier
    Lender · Nashville, TN · Member since 2024 · 700 posts · 284 votes
    2y

    Goodmorning Johana,

    Best bet is we refinance the note and see what kind of terms we can get going on this.

    Typically can close fairly quickly here in texas using hard money notes. I will send you a PM and see how we can help.

    0Reply
  • Adam BartomeoBusiness Member
    Real Estate Broker · Cape Coral, FL · Member since 2015 · 2k+ posts · 1k+ votes
    2y

    I assume that you are looking for creative ways to fund this. You can get cash from your credit cards. I posted on BP about 10 years ago about using credit cards to buy houses with 0% interest. Its all true and ligit. You can do a balance transfer right into your bank account, they normally charge you a 2% -3% upfront fee and give you 9 - 12 months 0%. I used to do it all the time but haven't had a need in the last 3 -4 years.

    [email protected]239-339-3969
    Bartomeo Property Management4.7150 Reviews
    WebsiteView Page
    3Reply
  • Corby GoadeBusiness Member
    Investor · Boise, ID · Member since 2014 · 3k+ posts · 3k+ votes
    2y

    A HELOC is always going to be the cheapest and most flexible cash you can get, other than actual cash.

    Can you get out of your current deal with your GC? Do you have a contract? This can be really sticky and contractors love fililng liens in situations like this. 

    2Reply
  • Kristen L GarnerBusiness Member
    Lender · Phoenix, AZ · Member since 2021 · 451 posts · 287 votes
    2y

    Hi Johana, Sorry to hear about your contractor situation! You could do a rehab refinance where the refi pays off the original hard money lender and the new rehab loan provides you with the additional funds needed. Terms are generally 12 months IO.

    [email protected]213-880-0434
    1Reply
  • Anderson S.Business Member
    Lender · Brooklyn, NY · Member since 2024 · 209 posts · 50 votes
    2y

    Hi Johana, we'd love to help with your project. Feel free to contact us for more information.

    [email protected]917-830-7144
    Brooklyn Funding Group59 Reviews
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    0Reply
  • Jay HurstBusiness Member
    Lender · Dallas, TX · Member since 2017 · 1k+ posts · 1k+ votes
    2y
    Quote from @Johana Villamil:

    Hello my fellow Big Pocketers,  I need some help! I am currently in the middle of a rehab, things won't left with my General Contractor and I need to take action. I have spoken with him several times already but it's like talking to the wall. I am 6 months in and he just prolongs my project. Sometimes I go days even weeks without work and as we all know time is money in this business! I already had another GC take a look at my property and he has done good quick work for other investors in the area that I know personally. I want to move forward with him but it will increase my rehab budget. I am using hard money and they are not willing to increase my rehab budget. I need recommendations as how I can go about getting myself some more cash. Has anyone ever been in this situation and needed more cash to finish their project? What would I be able to qualify for in this situation? 


     Do you have any other real estate you can borrow against? It can very difficult to get additional financing on a due  project in midstream. From a lender's perspective there is a risk of mechanic's liens being filed up to 4.5 months (in Texas) after they have been on site. 

    It would be much cheaper and easier to borrow  against a different property. 

    Hurst Real Estate, INC4.987 Reviews
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    0Reply
  • Erik EstradaBusiness Member
    Lender · Member since 2022 · 6k+ posts · 1k+ votes
    2y
    Quote from @Brandon Croucier:

    Goodmorning Johana,

    Best bet is we refinance the note and see what kind of terms we can get going on this.

    Typically can close fairly quickly here in texas using hard money notes. I will send you a PM and see how we can help.


    Refinancing a hard money loan to another hard money loan is not easy and may require the borrower bringing cash to the table if the ARV does not support the rehab budget and loan payoff amount. It may also resulting in a higher rate and higher fees. The rehab budget will also be held back which would not make sense in her current situation if she is short on funds. On top of that you will need to show cash reserves to support you can complete the project.

    You may want to consider tapping into a HELOC or an unsecured line of credit to finish this up. Maybe even partnering up with the GC or another local investor.

    [email protected]818-269-7983
    LuxePrivate Investments LLC 572 Reviews
    WebsiteView Page
    0Reply
  • Johana Villamil
    OP
    Investor · San Antonio · Member since 2024 · 22 posts · 13 votes
    2y
    Quote from @Adam Bartomeo:

    I assume that you are looking for creative ways to fund this. You can get cash from your credit cards. I posted on BP about 10 years ago about using credit cards to buy houses with 0% interest. Its all true and ligit. You can do a balance transfer right into your bank account, they normally charge you a 2% -3% upfront fee and give you 9 - 12 months 0%. I used to do it all the time but haven't had a need in the last 3 -4 years.


     Thanks for your insight Adam! 

    How many cards did you use? Were they all new or you were still on the promotional rate? I am assuming you have very high credit limits on your cards. I actually did look into this but it wouldn't be ideal for me since cash advances are capped at a percentage of your overall credit card limit which is usually at 30% more or less. With that being said I don't have a super high limit on my cards and I also am not on promotional terms anymore to get that 0% for 12 months or so. I mean depending on how much I needed it would have been an option. But in my case I need like 25k so I would have to apply for all new cards which will also have an impact on my credit. If you know of a different way to get cash from credit cards I would love to hear about it!

    1Reply
  • Johana Villamil
    OP
    Investor · San Antonio · Member since 2024 · 22 posts · 13 votes
    2y
    Quote from @Brandon Croucier:

    Goodmorning Johana,

    Best bet is we refinance the note and see what kind of terms we can get going on this.

    Typically can close fairly quickly here in texas using hard money notes. I will send you a PM and see how we can help.


     Yes I would love to connect and seen what we can workout!

    0Reply
  • Johana Villamil
    OP
    Investor · San Antonio · Member since 2024 · 22 posts · 13 votes
    2y
    Quote from @Corby Goade:

    A HELOC is always going to be the cheapest and most flexible cash you can get, other than actual cash.

    Can you get out of your current deal with your GC? Do you have a contract? This can be really sticky and contractors love fililng liens in situations like this. 

    Yes, I actually am working with an attorney and will be terminating my old GC.
    Can you get a HELOC on a distressed investment property? Correct me if I'm wrong but I thought the property would have to be completely renovated?  
    0Reply
  • Johana Villamil
    OP
    Investor · San Antonio · Member since 2024 · 22 posts · 13 votes
    2y
    Quote from @Erik Estrada:
    Quote from @Brandon Croucier:

    Goodmorning Johana,

    Best bet is we refinance the note and see what kind of terms we can get going on this.

    Typically can close fairly quickly here in texas using hard money notes. I will send you a PM and see how we can help.


    Refinancing a hard money loan to another hard money loan is not easy and may require the borrower bringing cash to the table if the ARV does not support the rehab budget and loan payoff amount. It may also resulting in a higher rate and higher fees. The rehab budget will also be held back which would not make sense in her current situation if she is short on funds. On top of that you will need to show cash reserves to support you can complete the project.

    You may want to consider tapping into a HELOC or an unsecured line of credit to finish this up. Maybe even partnering up with the GC or another local investor.


    Thank you Erik for your insight on my situation. I have been looking into the unsecured lines of credit as a good option for me. I am a new investor and have learned a lot with this deal. How do HELOC's work for distressed investments property? As my project is still not completely renovated I was not sure I would qualify.

    0Reply
  • Johana Villamil
    OP
    Investor · San Antonio · Member since 2024 · 22 posts · 13 votes
    2y
    Quote from @Kristen L Garner:

    Hi Johana, Sorry to hear about your contractor situation! You could do a rehab refinance where the refi pays off the original hard money lender and the new rehab loan provides you with the additional funds needed. Terms are generally 12 months IO.

    Hi Kristen thanks for your reply! 
    You mean to refinance my hard money loan into another hard money loan? 
    Since I have my rehab budget and the loan of the purchase price.
    how does this work and what are the fees associated with this?
    0Reply
  • Adam BartomeoBusiness Member
    Real Estate Broker · Cape Coral, FL · Member since 2015 · 2k+ posts · 1k+ votes
    2y

    I only used a couple of cards that I have had for years. They aren't new with an intro rate. Your current credit cards are always running promos for balance transfers. Its NOT a cash advance, its a BALANCE TRANSFER. Most cards allow you to take the full credit limit. I know investors that buy houses this way but I always kept it small.

    You said that getting a new credit card would affect your credit score, wouldn't getting a loan do the exact same thing? Its a creative way of getting cash without having to get a new loan. 

    [email protected]239-339-3969
    Bartomeo Property Management4.7150 Reviews
    WebsiteView Page
    1Reply
  • Johana Villamil
    OP
    Investor · San Antonio · Member since 2024 · 22 posts · 13 votes
    2y
    Quote from @Adam Bartomeo:

    I only used a couple of cards that I have had for years. They aren't new with an intro rate. Your current credit cards are always running promos for balance transfers. Its NOT a cash advance, its a BALANCE TRANSFER. Most cards allow you to take the full credit limit. I know investors that buy houses this way but I always kept it small.

    You said that getting a new credit card would affect your credit score, wouldn't getting a loan do the exact same thing? Its a creative way of getting cash without having to get a new loan. 


     Really? hmm I thought a balance transfer was transferring the balance you owe on one card to the next to avoid high interest rates. Im learning something new here thanks! Im interested in learning more about how to exactly do this. Will look more into this :) 

    1Reply
  • Corby GoadeBusiness Member
    Investor · Boise, ID · Member since 2014 · 3k+ posts · 3k+ votes
    2y
    Quote from @Johana Villamil:
    Quote from @Corby Goade:

    A HELOC is always going to be the cheapest and most flexible cash you can get, other than actual cash.

    Can you get out of your current deal with your GC? Do you have a contract? This can be really sticky and contractors love fililng liens in situations like this. 

    Yes, I actually am working with an attorney and will be terminating my old GC.
    Can you get a HELOC on a distressed investment property? Correct me if I'm wrong but I thought the property would have to be completely renovated?  

    You are correct- I was suggesting you get a HELOC on your primary- better rates and higher LTV.

    0Reply
  • Erik EstradaBusiness Member
    Lender · Member since 2022 · 6k+ posts · 1k+ votes
    2y
    Quote from @Johana Villamil:
    Quote from @Erik Estrada:
    Quote from @Brandon Croucier:

    Goodmorning Johana,

    Best bet is we refinance the note and see what kind of terms we can get going on this.

    Typically can close fairly quickly here in texas using hard money notes. I will send you a PM and see how we can help.


    Refinancing a hard money loan to another hard money loan is not easy and may require the borrower bringing cash to the table if the ARV does not support the rehab budget and loan payoff amount. It may also resulting in a higher rate and higher fees. The rehab budget will also be held back which would not make sense in her current situation if she is short on funds. On top of that you will need to show cash reserves to support you can complete the project.

    You may want to consider tapping into a HELOC or an unsecured line of credit to finish this up. Maybe even partnering up with the GC or another local investor.


    Thank you Erik for your insight on my situation. I have been looking into the unsecured lines of credit as a good option for me. I am a new investor and have learned a lot with this deal. How do HELOC's work for distressed investments property? As my project is still not completely renovated I was not sure I would qualify.


    You would need to do a HELOC on your primary or another property if you own other real estate

    [email protected]818-269-7983
    LuxePrivate Investments LLC 572 Reviews
    WebsiteView Page
    0Reply
  • Tanner Strand
    Specialist · AZ · Member since 2020 · 15 posts · 5 votes
    2y

    Hi Johana,


    Shoot me a PM! I have a connection that would be happy to discuss some possible scenarios. 

    1Reply
  • John Mason
    Member since 2024 · 1k+ posts · 351 votes
    2y

     Will look more into this :) 

    .

    https://www.chase.com/personal/credit-cards/balance-transfer...

    1Reply
  • Nicholas L.Pro Member
    Flipper/Rehabber · Pittsburgh · Member since 2018 · 6k+ posts · 5k+ votes
    2y

    @Corby Goade

    I think you started to ask what my questions were... I want to hear more details about the situation / rehab.

    @Johana Villamil

    can you share more information about purchase price, current amount spent, remaining work, what your existing contract says?  a lot of folks jumped in to help with the money question... but there's a lot of background missing here.

    0Reply
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