Ok I contacted a mortgage lender in my area about what I would like to do.
Here is his repsonse...
There are rehab loans you can utilize for something like this. A lot of them
require a builder and a lot of headache. However, we have a rehab loan that
is exclusive to us where we will lend you up to 80% of the completed value.
Meaning, if you find a house for sale for $30k, but the appraiser says when
you do the repairs you say you are going to do the house is going to be
worth $80k, we will give you up to 80% of the $80k...which would be
$64k...if you needed that much to do repairs on
Now there are stipulations to that. One is there can't be structural
changes...no adding on, no knocking walls out, etc. It's basically cosmetic
stuff...carpet, paint, siding, roof, doors, new bathroom or kitchen, etc.
Basically if I wanted to take down a portion of a wall between a kitchen and dining area I can't???
Is this a common practice for these rehab loans? Are they really going to check up on me, or is this just for the "appraisal" number and once they get it to determine the value after repairs I'm basically free to do as I please?
