Construction loan or Hard money Lender for this deal?

[Kevin G.]

Hello everyone,

I am new to house flipping and have recently gotten into the game. I came across a home in the Bay Area that requires extensive work and essentially needs a full rehab. The home is essentially bare bones, with the wood being in good shape but requiring new drywall, flooring, a full kitchen rehab, a full bathroom rehabs, electric work, and repair of the septic system outside.

The total rehab cost is estimated to be around $150k-$200k, and I'm wondering if hard money lenders typically finance a deal that requires this much remodeling costs and still fund 100% of the rehab. The current purchase price is $185,000, but I would likely go over asking since this is what we are seeing in the Bay Area market, even for flips.

The ARV for the property is $770k, and currently it sits at 60% of ARV if funding the full rehab. Therefore, I believe this deal should pass a hard money lender's criteria.

Alternatively, would a construction loan be a better option, given that this project requires a lot of work?

[Jay Hinrichs]

this is a HML deal all day long.. unless you have very good banking relationships IE LARGE deposits with a local commercial bank. And this is a flip  you will have a very hard time finding a bank to loan on that.. Banks got out of the flip funding business in 07 08 and have not really returned.. this is why you see HML taking over that space literally 100% of that volume.