BRRR on a 12500 sqft .Hard Money Lender or Construction Loan?

Question

I can either purchase the land for 150K+ rehab cost with hard money lender.

Or pay what they owe (50K) and get a construction loan and pay them after I refinanced the ARV. (would like the property to go to family)

The building is worth nothing as it is a manufactured home that sits on a foundation. I’m interested in building a duplex or triplex on the lot.

What is the best option?

Andrew Postell · Answer

@Ogie Cortes it would be strange for a hard money loan to be used on a new build...but maybe it's possible. Usually they want to see your new construction experience...but again, I'm speaking for your lender. The best advice I would tell you here is that you should be asking your lender these questions. A good lender will be able to show you these details so you can compare them to each other. Hopefully your lender can do this.

Aryia Bala · Answer

The cleanest and easiest way for you to get a 150k loan from a hard money lender. The file may become more complicated and therefore harder to get financing . As the purchase may not be considered an arms length transaction and some lenders do not like seller's second lien

Jeff Pasmore · Answer

That’s a great question! I could be wrong, but this sounds more like a construction loan rather than a flipper loan. Have you reached out to lenders like BackFlip, Bridgewater Capital, or Kiavi yet?

If you have, what did they say? If not, I’d encourage you to make a few calls—you’ll not only learn about the programs firsthand, but you’ll also build relationships with lenders who could be valuable for future deals.

As Dale Carnegie said, "Knowledge isn’t power until it is applied." Every conversation you have adds to your expertise, and the next time an investor asks for advice, you’ll be the one with the answers. Plus, people remember those who genuinely help them—it’s a great way to grow your network and influence in this business!

Let me know what you find out!

I may be wrong this sounds more like a contruction loan than a Flipper Loan? Have you called BackFlip , Bridgewater capital, Kiavi and ask? If Yes ? What did they say? If no , make some calls to check availability or process. #1 you will learn not only the programs , you will make a contact for the future and with knowledge comes the answers to give to the next investor who ask for help.

BRRR on a 12500 sqft .Hard Money Lender or Construction Loan?

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