Fix and flip funding

5 Replies

I have a house under contract, have a solid credit score, but I can't seem to find any private or hard money loans to use for the house. The purchase price is under 70% of the ARV, the issue I'm having is that this is my first flip, and I don't have $50,000 in liquid assets like a lot of these companies require, I need help. I don't know what to do to get this locked up.......

Jeff, 

I have been dealing with this same issue. I bought an 8 unit apartment building for $120,000. The current appraisal sits at $192,000. The repair costs roughly $30,000-35,000 but ARV should come in around $250,000. So, I'll be all in around $150,000 and should be about $100,000 to the good. My credit is around 740-750, income slightly over $100k annually.

However since it is my first one nobody wants to lend money so I can keep my capital in the bank short term. I had one group quote me a 6 month loan with 14% APR. I told the guy I have $15,000 cc limit with lower interest than that and could use that cc and $20,000 of my own cash short term before I'll pay 14% interest and passed his deal up. I get that these groups are in it to make money but it does seem finding good terms is tougher than I imagined.

Good luck in your search  and if you find a good option let us all know what you go with.

The HM loan for my first BRRRR was done with Patch of Land out in California (found them through BP too!). They loan up to a 75% LTV of the ARV, and required that I get a "rehab coordinator" since it was my first flip. I would recommend them!

Originally posted by @Jeff Silka :

I have a house under contract, have a solid credit score, but I can't seem to find any private or hard money loans to use for the house. The purchase price is under 70% of the ARV, the issue I'm having is that this is my first flip, and I don't have $50,000 in liquid assets like a lot of these companies require, I need help. I don't know what to do to get this locked up.......

First flip you should be able to get 80% of the acquisition and 100% of the rehab covered in draws.  You will need about 6 month's reserves though.

 

Originally posted by @Jeff Silka :

I have a house under contract, have a solid credit score, but I can't seem to find any private or hard money loans to use for the house. The purchase price is under 70% of the ARV, the issue I'm having is that this is my first flip, and I don't have $50,000 in liquid assets like a lot of these companies require, I need help. I don't know what to do to get this locked up.......

Without knowing the costs of this it is hard to give any realistic advice. What sort loan to cost or loan to value are lenders offering you.

it is pretty common that lenders want to see 6 months reserves, closing costs, any down payment.