Looking for funding, what direction should I take?
Hello fellow Investors, looking for suggestions on analyzing this current deal that I have on the table.....5year buy,hold,sell
Hi,
Not sure what financial strategy to use for a current project. need to borrow $500k for rehab and down payment on the seller assist purchase. $200k for rehab. Arv $1.4K The Seller is open to terms. Purchase price $989kHere are a few scenarios:1. Seller finance $689,000, $500k from you and 1st lean position bridge loan?2.seller finance 689k , $500k from you from portfolio loan. We own 5 rental properties. 3. Seller finance $689k, $500k from you for fix and flip 24 months4. Seller finance $689K, $500k from you for buy and hold rental 36-60 months
We are open to suggestions,
Maggie Nickerson
Hey Maggie
I do a lot of hard money and so I will show you what the typical hard money lender would do on this. If ARV at 1.4 Million is correct, they typically wont go over 75% of LTC or Loan to cost. Meaning your purchase at $989K + your rehab at $200K = LTC of $1,189,000.00 They would lend a max. of 75% of ARV so a max. loan amount of $1,050,000.00, so you would need to come in with $139,000.00.
That said, I do have one of my hard money lenders that will allow a seller carry back in 2nd mortgage position to their first, so if you find a lender that allows that, the seller could carry back the $139,000.00. Some lenders wont allow this without you having a min. skin in the game. If they allowed you to have 5% skin in the game, you would need to bring in $59,450.00 and the seller could carry back the rest. You would also need to cover closing cost out of pocket, unless you negotiate that the seller pay your closing costs.
I hope this helps?