I spoke to a local lender who told me that cd's could be collateralized for loans of 80% total ARV. With the cd as collateral they will quick cut checks for the re-hab per your own draw schedule. This was exciting to me because I am a conservative investment broker who looks for minimal risk and maximum reward along with the workability of the overall project. cd backed loans require low interest, interest only payments. My thought process is:
$50,000 cd for investor
Target properties with ARV of $100,000 to $200,000 (starter homes) - most active market
Self re-hab as I hold a general contractor's license
Re-sell and split profits 75/25 with invesor take 75%
Normal deal: $80,000 purchase with re-sale of $140,000 and $25,000 in repairs. 3-6 month turn
Investor collateral used $21,000
ROI for investor $19,950 (140k - 8,400 real estate fees - 105,000 total invested x .75)
I'm not giving away the farm by taking a lower split. I would also broker the real estate transaction and oversee the construction. I do renovation loans on a regular basis for FHA 203-Ks and have a full time construction team on payroll so I control costs very well. I also have full time HVAC/mechanical on staff as we do maintenance for our own and other property management companies.
Does anyone have any experience with these and have any suggestions?
Sorry I hit the back button and then hit post again
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