I recently got a home under contract, old beat up 3 bed 2 bath in a neighborhood that generates homes around the 90k area. I got it for $14,500. An LLC bought it for $1 from the previous owner that pretty much had squatters in it. So The LLC was just trying to dump it. New roof and a company is coming in to install a radon mitigation system so the basement is getting a vapor barrier installed all before I even close on the house. other than that we are looking at about a 50k rehab, ARV is at 90k. My problem is that my hard money lender just pulled out on me for the reasoning that I purchased the house for too cheap and the underwriters don't like it. First, Is this an actual excuse and two, does anyone have any recommendations for hard money lenders that typically deal with the smaller loans of around 65k in PA? Closing is in 3 weeks.

Most lenders won’t fund on it because of Rehab is 3x the purchase price. Is this your first deal?

It is my first deal.

With the arv being $90,000 it would be over most lenders after repair value.

Even if they did 70% arv based on $90,000 the max they could loan is $63,000.

So you would need to put down 15% to 20% of loan to cost.

I’m not sure if you used BiggerPockets calculator or used another program but how much profit you would have after putting down 20%?

Property is $14,500. Rehab is at $50,000. ARV is 90k. In the project for a $64,500. 20% of my own money puts me at $12,900. so loan from the lender needed is $51,600. total profit is $25,500 minus closing costs and paying myself back the $12,900 I'm looking at a $10,000 profit. Does that make sense? I can put a report together if it would be easier.

Sorry I messed that up. I'm looking at about a 20k profit. $90,000 minus $51,600 loan. This puts me at $38,400. Pay myself back the $12,900. Now I'm at $25,500. closing costs put me around 18k to 20k profit

@Kodi Floyd look around for another lender ASAP. Do you have any money set aside to buy the house and then set up your financing after closing? Do you have any line of credit you can use? You should be able to find a hard money lender as long as you have strong financials. Given this is your first deal you may have to put some money into the mix and your lender may go with a lower LTV.

I am trying to figure out my other options. I will be able to buy the house outright if I had to and then use lines of credit via my wife pulling personal loans and my own credit cards to fund the flip if I can't get a loan. I am currently calling every hard money lender on this list to see what i can get together or workout. Kinda stressful as I had everything planned out and then the money I though I had secured for this disappears. Didn't see that one coming honestly. Just curious if anyone had gone through a lender that is comfortable and flexible with these smaller loans.

Doran is exactly right..in your case no money to be made why it is hard to get a loan. Then what if something goes wrong and by the time you put money down etc you will be down to very little. Too much for so little. Maybe consider wholesaling it to a buy n hold investor. Will make the same or more with less headaches