HELOC and Hard Money?

[Kelly Conrad]

We were approved for a HELOC for $18,800, but with alll of our funds (including the HELOC), we'd just have ~43k. In our area, multi-family homes are 250k+ and we have to put 25% down, and so we are very short on what we need, especially if anything needs repair (even our own home!). Would it be wise to take hard money, and then pay off the hard money loan with the money from HELOC since that rate is so much lower than what hard money's rate is?

[Albert Bui]

Kelly it depends if the hard money lender or HML would allow you to put less than 20% down. I've received less than 20% down on mine but I've done many deals so that might be a different scenario. How many deals have you done with this HML and will they be willing to lend above 80% LTC (loan to cost)?

So I guess the point im trying to make is normally you need to bring your own 20% equity or cash or funds to do the deal, but yes there are HML's who lend 100% LTC up to 75% of ARV (after repair value) or some are 90% LTC up to 75 or ARV as well.