After reading, "Investing in Real estate With Little or No Money Down," I wanted to ask this, probably very beginner, question to anyone that may have experience using this tactic for someone who has little money outside of a Home Equity Loan (which would pay for the rehab- LTV 70% roughly 50G). This would be done for a potential flip, full asking is 49900.

Has anyone ever financed a property with say a 5/1 ARM, with no money down (is that possible?), paying PMI to lock up the home then used a Home Equity Loan to cover the rehab and is this a preferable option?

I have been crunching the numbers between this, a hard money loan, a personal/Home Equity Loan and a straight personal loan and if I'm doing them right, it is the cheapest option of the 4.

All houses in the neighborhood and directly adjacent are worth 125-150g, I'm looking to put enough into the project to get the ARV to at least 125, within reason of course.

If more info is needed please ask.

Thanks in advance!

@John K. Eck  Consider asking around to local banks in your area and ask for the commercial lending department.  They may be able to provide purchase + rehab financing all in one loan.

I did this once with about the same price as yours: $50k purchase + $25k rehab, ARV $110k. The bank provided the funds and I put down 20% on the purchase price ($10k). Very little closing costs so about $12k out of pocket for the deal.

Only catch is yours is a flip, not sure if banks would like that as much, but ask around and good luck!

- Tom