Where to get money for renovations?

6 Replies

I've always been nervous to buy a property that might need anything more than some paint and new carpet....

So, I see places with potential but shy away because I'm not sure where to get money for renovations?

Any ideas...or advice?

Private money would be the way to go here. You can borrow money from individuals in exchange for a good rate of return, partial equity or both. As long as the numbers justify the private loan this would be the easiest way to go. You can secure the loans with a second mortgage against the properties. A good source are people with IRA who are not getting a good return on their investment. Check out Quest IRA on how people are using their IRA to invest in real estate.

@Juliette V. There's construction loans; hardmoney lenders; private lenders; HELOC; IRAs to list a few. Depends on the type of property regarding 203K loans which are via FHA.



There's a thread on BP about using business credit cards to fund down payments and rehabs. The positives are that business cards do not appear on your personal credit report; they report to Dun & Brandstreet and similar.

They often have special offers of 0% financing for up to a year or 15 months. Home Depot also offers these deals, but check if it's a personal credit card. 

Once the rehab is complete, the idea is to refi or sell before your final 0% payment is due with the biz card. Make sure you make at least the minimum payment due every month, or the interest rate will revert to some ridiculously high number, and retroactively too. That's the downside. Have several plans for an exit strategy.

A current project I'm on is highly financed with credit cards and lines of credit. Home Depot offers 2 years no financing on anything over $299 - we had one order of about 10k so YEAH of COURSE WE'LL DO IT. The time line has been going quite well, we're maybe a week and a half behind our original schedule but its all the small stuff now. 

If you're comfortable using debt like this then I would suggest that you go on bankrate.com and apply for as many cards as possible within a 14 day business period. Similar credit inquires in a 14 day period counts as one hit. I applied for a dozen or more cards that offered the 0% financing for some length of time.

Great question. You can also try this option with a contractor that u know and trust. I don't know your financial situation, but if you know a contractor who would be willing to partner with you on a deal, that could really work out. You can purchase the house and pay for all the material, and he can provide the labor. Instead of you paying for the labor up front, you can agree to split the profits when you sell the home. You can structure it in a way where you can ask him/ her what they would normally charge (labor only) for a job like this. Let's say he/she says 10k. If you know you have a potential to make let's say 30k or more in profits on the deal, you can tell him/her that when the house sells they can potentially make 15k at the end instead of the 10k. Let him/her know everything will be in writing, so that they can feel secure. You can also choose to split the profits 50/50, allowing them to make even more money. I'm sure there's other ways and ideas to make this type if partnership work. This is just one idea. You can also have the contractor pay for the material or you can open up a Home Depot or lowes credit card if your credit permits. Etc.

All the best

@Juliette V.  - I am sure you may have tried some alternative financing. There are tons of options available to get the funding. It all depends on how much can you afford?

Credit Card advances, HML, HELOC, private money, refinancing, rehab loans,portfolio loans..I can go on and on, but unless we have more specific details, would not be able to give the right feedback

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