"As is, as complete" Financing

7 Replies

Hey all--

Looking to do my first BRRR deal, but 2 agents I've spoken with have suggested I look into leveraging my capital from the onset. They've recommended I do an "as is" loan for the purchase / rehab. Once the units are stabilized, refinance into a conventional loan. I haven't been able to find much detail around the terms of "as is" loans, so I wanted to see if anyone here could shed some light. My guess is that the interest rate is higher and they typically come with more points associated with the loan origination. Anyone ever structure a deal like this before? Any insight would be greatly appreciated!

Originally posted by @Mark Durham :

They probably mean Hard Money. Done every day everywhere investors buy deals.

 Thanks for the reply! I thought they were referring to Hardmoney lending, but that is not the case. I spoke to a mortgage broker who was familiar with the loans but wasn't really able to explain them to me in any great detail. These loans are through a financial institution that much I do know.

If a mortgage broker who was familiar with the loans couldn't explain them to me in any great detail, I wouldn't use him/her. 

Contact the actual financial institution who offers the loans and ask them directly.

Originally posted by @Todd C. :

Hey all--

Looking to do my first BRRR deal, but 2 agents I've spoken with have suggested I look into leveraging my capital from the onset. They've recommended I do an "as is" loan for the purchase / rehab. Once the units are stabilized, refinance into a conventional loan. I haven't been able to find much detail around the terms of "as is" loans, so I wanted to see if anyone here could shed some light. My guess is that the interest rate is higher and they typically come with more points associated with the loan origination. Anyone ever structure a deal like this before? Any insight would be greatly appreciated!

They're definitely talking about hard money if the property needs rehab.  Conventional lenders don't want any rehab unless they're doing a 203K or something like it (Homestyle renovation loan etc...)

 

@Todd C. you can certainly find loans that fit the requirements you listed.  Plenty of lenders will lend money (and not necessarily hard money) on "as is" condition.  Ttry posting in your state forum for some suggestions. Bigger Pockets has some great state forums and usually there are good locals that monitor those. Also, try some local real estate meetup groups. Meetup.com is a good resource for those but some post here on Bigger Pockets too. Hope this helps.  Thanks!

@Todd C.

In SFR at least, the more beat up it LOOKS, the less likely you can get hard money financing, the more likely the owner is to sell it for peanuts because s/he has to sell it to a cash buyer. A house can LOOK a certain way and BE a very different way. The very worst-looking houses are occasionally in the very best condition for you as a buyer of distressed properties, interior rehabs that have been started but not completed.

Still kicking myself over not buying a duplex like this years ago for an insanely low price in my area.

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