Questions about Hard Money Lenders. I need help please!!

Questions about Hard Money Lenders. I need help please!!

Flipper · Round Lake, IL · Member since 2015 · 8 posts · 1 vote

Hello Felow Investors,

Im a newbee investor and was lucky enough to find a really good real estate agent that works with new investors. We found an invesment property with an ROI of 16-18% in a really good area and we need to act fast as this is a hot deal. I was always told "find the deal and the funds will come in". Well I'm in that situation right now and it's not looking good.

My problem is that every hard money lenders that I talked can only fund up to 80% of the purchase price and requires me to come up with the other 20%. This also does not include cost for rehab construction. I can only come up with 1/4 of the funds for the required 20% and my private investors can only do so much. I do not have any funds available for the rehab construction and I am too early in the game and do not know any investors to partner with.

What can I do to resolve this issue? Are there any other alternatives to finance this deal besides Private Money lenders or partnering with another Investor? Are there any companies that can lend on both the purchase price and rehab cost? If so, can you please suggest who they are. I really need your help. Thank you so much.

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Real Estate Investor · Burlington, VT · Member since 2010 · 2k+ posts · 1k+ votes
11y

@Jay Roque

@Jay RoqueHave you tried small local banks in the area?  Check with the commercial lending department. I've been able to get purchase + rehab funds for 20% down on the purchase price.  

Or try saving more money before jumping into this. Worst spot you want to be in is doing your first flip and coming up short on funds.  

Good luck!

- Tom

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  • Rental Property Investor · Woodbridge, VA · Member since 2014 · 229 posts · 124 votes
    11y

    Have you considered doing a "live-in" flip? You could get an FHA loan for approximately 3.5% down, fix it up while living there, then move after you've been there for about a year.

  • Pittsburgh, PA · Member since 2015 · 41 posts · 16 votes
    11y

    @Jay What sort of numbers did you put in front of the HMLs that you tried already? Maybe that is where the issue is?

  • Real Estate Investor · Burlington, VT · Member since 2010 · 2k+ posts · 1k+ votes
    11y

    @Jay Roque

    @Jay RoqueHave you tried small local banks in the area?  Check with the commercial lending department. I've been able to get purchase + rehab funds for 20% down on the purchase price.  

    Or try saving more money before jumping into this. Worst spot you want to be in is doing your first flip and coming up short on funds.  

    Good luck!

    - Tom

  • Rehabber · Chicago, IL · Member since 2015 · 73 posts · 20 votes
    11y

    You might try an FHA 203K. I did that with a house I fixed. You have to live in it, and it is kind of a pain, but it does work.

  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    11y

    @Jay Roque  agree with the above you may a tad undercapitlized at the moment take on a partner with capital get some expeirnce and capital then venture out on your own

  • Cape Coral, FL · Member since 2008 · 469 posts · 32 votes
    11y

    so how'd this ever turn out? So many unconcluded threads. So many stories ive yet to read. Tell tell. 

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