Renovation loan: Lender referrals needed

10 Replies

BP folks,

I am thinking of investing in a Quadplex which will cost about 150K and another 40K in renovations?  Can I get a loan on 190K with 25% down? 

Are there lenders and banks who provide renovations loans? Please send me any referrals you might have.

@Gaurav A. Call the smallest 10 or so banks in your area and ask for their portfolio lender. 

I do these types of commercial loans all the time and am able to put 20% down on the total cost of repairs and improvements.

Most of them will want a borrower who has a good amount of RE experience, but they may be flexible depending on how strong your financials are.

@Gaurav A. One loan covering both.

I may be oversimplifying but mine work like this:

-100k Purchase price

-50k in repairs

-150k total loan needed

-30k down payment by me 

The lender then does usually 2 to 4 draws depending on how much work my contractor needs. Based on the after repair value, I am usually able to refinance and get back out my initial investment.

Some portfolio lenders won't do construction loans on investment properties, but I've found plenty that will do these in my market.

Gustavo,

The answer to your down payment question depends on credit, experience and liquidity. A local bank will provide the acquisition piece but may not assist with rehab, Is the property located in the same state where you live?