Hi fellow BPer's,
I'm a longtime lurker and podcast listener. My first post is a panicked one! I own a duplex in Boston that is my primary residence, have completed 1 flip on my own, and been apart of 5 others. I have a bank foreclosure New Hampshire SFR under agreement with a closing date of 9/21 and a financing contingency date of 9/4. Purchase price is 137k, but with closing costs and other "fees", i'm looking at around 150k to close. I have a 794 credit score, I have 90k in cash, and the house should appraise conservatively for 230k once complete. It is gutted and needs a good deal of work, so it will not qualify for FHA. I intend to do the work myself as a live in flip, so a 203k doesnt work. I was pursuing a HELOC on my duplex (appraised at 575k with 310k left on the note) to cover the remainder needed to close and to fund some of the renovation. I found out today that the bank i was working with is not going to approve my HELOC due to debt/income ratio (i own my own business, so my accounting favors lower taxes).
Based on all of that, does anyone have any suggestions where I raise 60k in a week so this deal doesn't fall through? I'm thinking my only option is private lending, hard money, or losing the deal, any other ideas would be very helpful.
I haven't done any work with hard money, yet, so I don't have any advice for that route.
If I was in that situation though, the first thing I would do is talk to family and friends. Offer them 15% interest for 6 months. Make sure to bring up the recent stock market performance.
Hey @Matt Leonard ! I wish I was welcoming you to BiggerPockets on less dire circumstances... I'm a Realtor up in NH so I know a few people who might be able to help. You can try a couple of things. Hard money, or working with a traditional lender who is less strict.
Send me a PM with your information and I'll give you a call a little bit later today and we can have a chat about your situation and see what we can do.
You can't get hard money in NH if you are going to live in it, because it is a residential loan. In NH, the guidelines for residential are even more stringent than federal guidelines, so the lender MUST be licensed to do residential, and after the FRM crisis, I don't know any private lenders in NH that are licensed to do residential mortgages.
None. Nada. If there are any, please enlighten me, I can send them a lot of referrals.
Friends, family and unsecured loans are your only avenue as far as I know. Talk to them about taking a second position on the duplex. If the duplex is in MA, then MA laws apply, not NH. If you are securing the note with the property in NH, then NH laws apply.
Hard money lenders aren't likely to loan you the money since you intend to live in the property. (Most hard money lenders don't loan on owner occupied properties.)
Your best bet, especially considering the short timeframe, is a private loan from a friend and/or family member.
Just a quick thought. You could use bankrate to find a different lender, or get a personal loan. It seems like personal loans are starting to come back, at least looking through my junk mail.
I used bankrate to find a few HELOC options. Not all bank guidelines are the same. If you have that much equity in your home, you could talk to your existing bank to see if you rolled some credit cards and other things into the line, whether that would bring down your ratio's. I am currently doing that, and I first was not accepted because of ratio issues, but I rolled a couple of credit card balances into the HELOC and then the ratio's worked (I had a really nice LO who let me run a bunch of scenario's by her - the first no may not be the end. I pushed it about five different ways with the "well, what if we did.....")
The main issue is that you are in a really fast time crunch. I know a lot of people don't want to do this, but I did use 20K of credit card balance once when I was in a crunch. Just a thought, and I know you need 60K'ish.
You might want to look to partner, move the deal to someone else, or walk away. What is the rehab cost and where is that budget coming from? I would suggest moving slower and line up funds prior to w/ additional outs when something goes wrong.
I agree with @Derek Walvoord . HELOC is a bank-specific product, so call more banks.
Like many have mentioned, get private funding. You can also find things online, like
https://www.prosper.com/ that do lending.
@Matt Leonard Welcome.
Who's the Seller? maybe Seller Financing?
I applied for a Kabbage account in case of a quick need for a lot of cash. I haven't actually used it but they approved me for 50k to start with.
Thank you all for the help and tips! I contacted the local credit union that we do all of our business banking through for my (non-real estate) company and they are expediting a HELOC as we speak. Probably can't get it done in a week, but I'm also requesting a later financing contingency date which should make this route doable. Worst case scenario, i have talked to friends and family and have lined up enough to get me through close if all else falls through. I guess the lesson here to anyone finding this thread in the future is to get all of your financing in place well before an offer and that smaller local banks kick *** compared to the larger ones. I've had 3 calls from people at the credit union in the past 2 days, which is 1 more than I ever got in a 4 month nightmare with TD Bank. They reply quickly to emails and seem like they actually want to make things happen.
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