Here's my situation. My business partner and I have a great deal on a 6-unit under contract. Cash purchase. Purchase price is $97,000. Expected rehab costs are approximately $130,000. Closing and carrying costs are another $8,000 or so. Total all in cost $235,000. ARV conservatively will be approximately $300,000 (but likely closer to $350,000).
We just had a private lender, with whom I worked in the past, tell us that he is unfortunately not going to be able to fund the deal. We are under contract to close by 12/31/17. So, we need to find other financing fast. The private lender terms were 10% interest, one year term, interest only payments, first position lien, insurance and title insurance, and personal guarantees from myself and my partner. The lender was going to provide 100% of the purchase price and the rehab costs.
I would like to find something comparable out there. Any suggestions? We don't want to pay hard money lender interest and we can't go to a conventional/commercial bank because the property needs too much work.
Even if we could get 70%-80% of the deal financed (i.e. 100% of purchase price and part of the rehab), we could come up with the rest of the funds (we will have access to approximately $75,000 once a commercial refinance on another building I own completes in January).
Has anyone had success with any peer-to-peer lending platforms? I have previously tried RealtyShares, but the guy who I spoke with said that my deal was too small for them (it was another $200,000+ project). Has anyone tried to get financed through PeerStreet? Anything else that's similar?
All suggestions would be appreciated. Thank you.
One thing that most lenders are going to look at is the fact that your reno budget is more than your purchase price. Because this is a heavy rehab, you need to be sure you are selecting the correct lender. What sort of experience do you have doing flips?
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