Funding a Rehab on an Already Owned Property

Denver, Colorado
Creative Real Estate Financing
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Funding a Rehab on an Already Owned Property

Shane RobertsPro Member
Investor · Denver, CO · Member since 2017 · 20 posts · 12 votes

Hello,

We own a SFH in NE Denver (3/1 & 965 sq ft) and are looking to renovate and sell. Currently we owe $240, it is worth about $400-425k. Can anyone recommend individuals, lenders, or strategies we can use to fund this? Looking for about $60k.

Thank you!

-SR

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Doug SmithPro Member
Lender · Tampa, FL · Member since 2013 · 2k+ posts · 2k+ votes
9mo

That's actually a pretty common loan that we see a lot. You'll first want to gather up a few things. First, is this in your name or in the name of an entity like an LLC or S-Corp? When did you purchase the property? You'll need the following: 1) A "Scope of Work" that details the work to be done and the cost (your GC should be able to provide that to you, 2) Several documents from your entity a) The Articles of Organization, b) the EIN Number, c) the Operating Agreement/ByLaws, 3) The Driver's License of each owner, 4) You might want to prepare a personal financial statement for each owner. 5) 2-3 months of bank statements (unredacted included all pages), & 6) The most recent mortgage statement you have. The lender can pull your tax bill, but they will likely have "builder's risk" insurance requirements. Finally, have you done a Comparative Market Analysis (CMA) to justify your ARV (As Repaired Value). With those items, you'll be ready to chat with a lender like us to get that done. It's a relatively simply process, but I would start gathering that info as any legit lender is going to need that stuff at some point.

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  • Doug SmithPro Member
    Lender · Tampa, FL · Member since 2013 · 2k+ posts · 2k+ votes
    9mo

    That's actually a pretty common loan that we see a lot. You'll first want to gather up a few things. First, is this in your name or in the name of an entity like an LLC or S-Corp? When did you purchase the property? You'll need the following: 1) A "Scope of Work" that details the work to be done and the cost (your GC should be able to provide that to you, 2) Several documents from your entity a) The Articles of Organization, b) the EIN Number, c) the Operating Agreement/ByLaws, 3) The Driver's License of each owner, 4) You might want to prepare a personal financial statement for each owner. 5) 2-3 months of bank statements (unredacted included all pages), & 6) The most recent mortgage statement you have. The lender can pull your tax bill, but they will likely have "builder's risk" insurance requirements. Finally, have you done a Comparative Market Analysis (CMA) to justify your ARV (As Repaired Value). With those items, you'll be ready to chat with a lender like us to get that done. It's a relatively simply process, but I would start gathering that info as any legit lender is going to need that stuff at some point.

    2Reply
    • Shane RobertsPro Member
      OP
      Investor · Denver, CO · Member since 2017 · 20 posts · 12 votes
      9mo
      Quote from @Doug Smith:

      That's actually a pretty common loan that we see a lot. You'll first want to gather up a few things. First, is this in your name or in the name of an entity like an LLC or S-Corp? When did you purchase the property? You'll need the following: 1) A "Scope of Work" that details the work to be done and the cost (your GC should be able to provide that to you, 2) Several documents from your entity a) The Articles of Organization, b) the EIN Number, c) the Operating Agreement/ByLaws, 3) The Driver's License of each owner, 4) You might want to prepare a personal financial statement for each owner. 5) 2-3 months of bank statements (unredacted included all pages), & 6) The most recent mortgage statement you have. The lender can pull your tax bill, but they will likely have "builder's risk" insurance requirements. Finally, have you done a Comparative Market Analysis (CMA) to justify your ARV (As Repaired Value). With those items, you'll be ready to chat with a lender like us to get that done. It's a relatively simply process, but I would start gathering that info as any legit lender is going to need that stuff at some point.


       Thanks Doug. I will reach out to you via direct message.

      0Reply
  • Erik EstradaBusiness Member
    Lender · Member since 2022 · 6k+ posts · 1k+ votes
    9mo
    Quote from @Shane Roberts:

    Hello,

    We own a SFH in NE Denver (3/1 & 965 sq ft) and are looking to renovate and sell. Currently we owe $240, it is worth about $400-425k. Can anyone recommend individuals, lenders, or strategies we can use to fund this? Looking for about $60k.

    Thank you!

    -SR


     Is the property in a livable state? Is the rehab purely cosmetic?

    [email protected]818-269-7983
    LuxePrivate Investments LLC 572 Reviews
    WebsiteView Page
    0Reply
    • Shane RobertsPro Member
      OP
      Investor · Denver, CO · Member since 2017 · 20 posts · 12 votes
      9mo
      Quote from @Erik Estrada:
      Quote from @Shane Roberts:

      Hello,

      We own a SFH in NE Denver (3/1 & 965 sq ft) and are looking to renovate and sell. Currently we owe $240, it is worth about $400-425k. Can anyone recommend individuals, lenders, or strategies we can use to fund this? Looking for about $60k.

      Thank you!

      -SR


       Is the property in a livable state? Is the rehab purely cosmetic?


       Yes, in a livable state. Recently had tenants move out. Upgrades are cosmetic.

      0Reply
    • Jake YuskaitisBusiness Member
      Lender · New Jersey, USA · Member since 2022 · 254 posts · 67 votes
      8mo
      Quote from @Shane Roberts:
      Quote from @Erik Estrada:
      Quote from @Shane Roberts:

      Hello,

      We own a SFH in NE Denver (3/1 & 965 sq ft) and are looking to renovate and sell. Currently we owe $240, it is worth about $400-425k. Can anyone recommend individuals, lenders, or strategies we can use to fund this? Looking for about $60k.

      Thank you!

      -SR


       Is the property in a livable state? Is the rehab purely cosmetic?


       Yes, in a livable state. Recently had tenants move out. Upgrades are cosmetic.


       very simple then. C/O refinance. we can that kind of loan no problem.

      [email protected]551-287-6884
      Frontier Funding LLC533 Reviews
      WebsiteView Page
      0Reply
  • Andrew Zamboroski
    Lender · Member since 2021 · 495 posts · 130 votes
    9mo
    Quote from @Shane Roberts:

    Hello,

    We own a SFH in NE Denver (3/1 & 965 sq ft) and are looking to renovate and sell. Currently we owe $240, it is worth about $400-425k. Can anyone recommend individuals, lenders, or strategies we can use to fund this? Looking for about $60k.

    Thank you!

    -SR

    Sounds like a good candidate for a refinance with rehab.
    1Reply
    • Shane RobertsPro Member
      OP
      Investor · Denver, CO · Member since 2017 · 20 posts · 12 votes
      9mo
      Quote from @Andrew Zamboroski:
      Quote from @Shane Roberts:

      Hello,

      We own a SFH in NE Denver (3/1 & 965 sq ft) and are looking to renovate and sell. Currently we owe $240, it is worth about $400-425k. Can anyone recommend individuals, lenders, or strategies we can use to fund this? Looking for about $60k.

      Thank you!

      -SR

      Sounds like a good candidate for a refinance with rehab.

       My hesitation with a full refi is we a minimum amount of cash we would like to get out of the property and if all the offers we receive are too low we would keep as an LTR until the market start to pick up. We are at a 3.85% (our first primary house) so I don't want to refi out of that. 

      0Reply
  • Charlene Livers
    Virginia Beach, VA 23452 · Member since 2024 · 88 posts · 14 votes
    9mo

     I know a lender who does refi and rehab loans

    0Reply
  • Jason Potrzeba
    Lender · Warwick Rhode Island · Member since 2023 · 37 posts · 20 votes
    9mo

    I have home improvement loans available if the property is in your name and your income can be documented.

    We use the FHA Title One home improvement loan, so no equity is required. Never a prepay and that will fit if you are planning on selling soon.

    Reach out if you want to look at loan amounts based on where you think your credit is.

    Jason

    1Reply
    • Shane RobertsPro Member
      OP
      Investor · Denver, CO · Member since 2017 · 20 posts · 12 votes
      9mo
      Quote from @Jason Potrzeba:

      I have home improvement loans available if the property is in your name and your income can be documented.

      We use the FHA Title One home improvement loan, so no equity is required. Never a prepay and that will fit if you are planning on selling soon.

      Reach out if you want to look at loan amounts based on where you think your credit is.

      Jason


       Thanks Jason. I will reach out.

      0Reply
  • Jake YuskaitisBusiness Member
    Lender · New Jersey, USA · Member since 2022 · 254 posts · 67 votes
    9mo

    $60k is very low. there are people that will do it but under $100k most lenders avoid.

    [email protected]551-287-6884
    Frontier Funding LLC533 Reviews
    WebsiteView Page
    1Reply
  • Kassidy BensonBusiness Member
    Professional · Denver, CO · Member since 2015 · 15 posts · 6 votes
    8mo

    Hi Shane, what about a home equity line of credit on your primary residence? How much work do you plan to invest in the home? Have you run the numbers to ensure that it is worth renovation. Do not refi and lose your 3.85%, it won't cash flow if you decide to keep it.

    0Reply
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