financing for distress properties

[Eddie Marcano]

Hello BP 

I have a Question when it comes to purchasing distressed or properties in need of rehab.

We currently own a 5 unit in Schenectady,NY. The property is free and clear. Originally, our first approach was to refinance the property and use the funds to purchase another. Refinancing seem to be the way to go.

My question is: Is hard money or private lenders the only way to purchase properties in need of some rehab or are there any institutions that will lend to ARV with traditional rates?

Thank you all in advance.

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[Laura Williams]

I would say the same as everyone else & find a good bank that offers portfolio mortgages. I talked to one that told me that they will give a line of credit on places that you already own ..up to a certain percentage of value. Then you can use the line of credit to buy & rehab the house. (You get the advantage of paying all cash for the deal) After it's rehabbed you then go back to them & they will transfer it into a regular loan so you have it under a fixed interest rate for a period of time and your line of credit back. Something like that would be how I would do it.