I am looking for sound advice on this situation...
My mentor and I have home, and land that we own out right in the Richmond,VA metro area, the home needs a total rehab that will cost about 40K to bring it to market value. We are discussing "Hard Money Loans" but the issue with this is 1) we only need the rehab funds. 2) We are both going have an issue being approved for a conventional loan do to the fact that we area both full time investors.
What are some options to circumvent this issue? Thx!
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The best thing to do in this case is to find a private lender who can give you the rehab funds you need. You can secure the lender with a lien on the property (1st or 2nd). If it's a 2nd lien position you would have to pay a higher interest on the note compared if it's in 1st position; for example 10% interest if its on 1st and 15% if its on 2nd. You negotiate this with the private lender. The key to making your investment attractive to any lender is keeping the CLTV (Combined Loan to Value ratio) low, say no more than 70% (if house is worth $100k, all loans totals no more than $70k).
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