Updated almost 8 years ago on . Most recent reply
How to Financing a rehab?
I have rehabed 3 properties now. 2 hold 1 I sold. They have all been out of pocket. I'm talking to a lender about different loans. The property that I'm going after is a single family that I'm planning on turning into a triplex. So I was asking about 203k and homestyle Fannie Mae. The lender is telling me it's to many hoops to jump through with these packages. He's advising me to do conventional and take a loan on one of my other properties. Which are mortgage free to cover rehab cost. Than after rehab refinance. I was thinking of USDA but not sure with its a forclosure. Any advice on financing when it comes to dealing with banks?
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Unless you are planning on 'House Hacking' you won't be able to use the 203k or USDA loan. The easiest way with the bank is probably to refinance one of the properties that you have mortgage free. If it was a property that you fixed up you will probably be able to get all your cash out and just leave the equity you built up from the rehab. The BRRR strategy.
If USDA covers where you want to invest and you want to use a government program I'd check out Housing Direct Loans.
I haven't got to use that program, but want to at some point as it is kind of like a USDA for investors.