So I always hear people talking about getting the financing and everything to purchase a rental of fix and flip. I don't really hear anyone talking about how they financed or cover the cost of rehab part of it. What are some of the best way to pay for the rehab. My single family home I lived in for about 5 years and fixed it before I turned it into a rental. I'm wanting to buy another rental but I would pretty much only have the money for the down payment. I do have equity in my current home I live in and the rental. I feel like most people use their equity to make another house purchase though?
@Jeremy Klein I think it depends on the investors situation. I always recommend using leverage as there are plenty of specialized/private money lenders out there who can help you fund the acquisition and rehab of a project. In some case, this can be non-recourse money as well.
I am happy to talk in more depth about it if you want to call or PM.
My plan is to tap friends for working capital to finance a down and holding costs, then go to a hard money lender for purchase and construction.
Does this sound reasonable to those who have been in the biz for a bit?
@Jeremy Klein you have many options here including these which you may want to explore:
- A personal loan
- A 0% short term line of credit from your current lending institution
-Credit Cards (not the best option)
-HELOC (Also may not be the best option)
-Peer to peer lending
Talk to the financial institutions that you have a relationship with, they may be able to offer you funding with competitive rates.