Financing a Local Deal

4 Replies

Hello, I found a great deal with my business partner. We have the money to put down at least 20%, however we would need a loan for the the rest plus renovations. The house is not in livable condition so conventional financing is out the door.

I know hard money is an option but we would be paying minimum 9% interest for that.

Any ideas on creative financing for this?

Note: I am in Pennsylvania and my partner can do the majority of the work himself.

Thanks so much for any help!


@John Rody . Reaching out to friends and family may be a good way to find private capital. Also networking at REI events for this deal and future deals. Also the marketplace forum may be a good place to place an ad.

There are many private investors on BP that would review your deal and work with you. 

Best of luck in all your endeavors.  

Look at the overall numbers on the property and shop around for the best rate and terms among the lenders.  As mentioned, you can also ask family and friends to lend you money at a lower rate.  Seller financing is an attractive option if the seller is amenable... maybe you could give them a lump sum at closing and have them carry a note with a 12-month term and no prepayment penalty.

Don't discount the local banks and credit unions either.  Approach them with the property and the business plan and see if they'll lend.  We have a regular bank loan and are applying for a loan from a credit union to do similar rehabs, and they're both including renovation costs in proceeds.  I've found that the smaller banks with fewer branches are usually more likely to lend in such situations - especially the institutions that don't sell their notes on the secondary market.

Purchase + Renovation Money loans:

  1. FHA 203k - owner occupied only
  2. VA Renovation - temporarily suspended since March 2020
  3. Fannie Mae Homestyle - owner occupied or non-owner occupied options
  4. Freddie Mac ChoiceRenovation - owner occupied or non-owner occupied options