Rehab loans when you own house free and clear?- Westhampton NY

[Stephanie Lella]

Hi BP,

To make a very long story short… I have the opportunity to take ownership of my mother's house and have the house free and clear; it's completely paid off. It is a single story ranch, 3 bedroom with full basement valued in the $397k neighborhood. With work it could be worth $500k +. The house needs serious rehab. I am thinking at least $150k. The lay out of the house is so poorly done, it's tempting to just knock the entire thing down and start over.

The house is located in Westhampton, NY, a very rich beach community where houses just minutes away sell for over $5 million. My house, after renovation, could rent for 20K for just the four months in the summer, or could be $3k/month year round. I am in a pretty good financial situation but I am still only 25 yrs old, and I don't want to deplete all my savings on rehabbing the house. In my research, it seems like most rehab loans are wrapped into a pre existing mortgages. Since I won't have one, are there any loans out there for just rehab?