Looking for Private Lender for Fix & Flip - collateral backed

[William Ingraham]

Looking for a reasonable private lender to help borrow against my primary residence which I own in cash and is worth ~$750,000.

My issue currently is I can only qualify for ~$300,000 for a traditional mortgage, but looking to borrow up to $600,000 in order to buy 2-3 single families to fix and flip. My 2023-2024 1040 income is low since I worked on my primary for most of 2023-2024, which I made $350,000 tax free on last year. I can find hard money for ~10.5%, but wondering if there's any means of find something closer to traditional HELOC rates(~8-8.5%).

Also wondering if people think it's easier for me to first get the $300,00 traditionally and then try to borrow privately for the renovation costs once I buy 1-2 of the homes to flip.

[Erik Estrada]

Quote from @William Ingraham:

Looking for a reasonable private lender to help borrow against my primary residence which I own in cash and is worth ~$750,000.

My issue currently is I can only qualify for ~$300,000 for a traditional mortgage, but looking to borrow up to $600,000 in order to buy 2-3 single families to fix and flip. My 2023-2024 1040 income is low since I worked on my primary for most of 2023-2024, which I made $350,000 tax free on last year. I can find hard money for ~10.5%, but wondering if there's any means of find something closer to traditional HELOC rates(~8-8.5%).

Also wondering if people think it's easier for me to first get the $300,00 traditionally and then try to borrow privately for the renovation costs once I buy 1-2 of the homes to flip.

 Hi William, 

It will be very challenging to find a hard money lender that will cross collateralize with your primary residence. There are far too many consumer regulations for most HMLs to even consider doing this loan. 

I would recommend getting a HELOC for the downpayment of the flips on your primary and then doing a traditional Fix and Flip Loan for the purchase of your flips. I would not be worried as much about the rate, but rather your expected time to renovate, flip and sell for the anticipated ARV. I would also prepare an exit strategy as a rental, incase the property does not sell...