90-100% LTV for flips in Massachusetts?

[Tyler L.]

My partner and I are looking at foreclosures in New England in the $250k-$350k range to rehab and flip. We’ve looked at hundreds of listings to familiarize ourselves and have found about half a dozen gems (light rehabs that would be an all in of 60-70% ARV). I’m aware that most lender in the 90-100% range are less-than-legitimate. The problem is, we’re college students who alternate between working and attending school. We have good credit (by any standard) and a decent bank account (by college standards) but not enough to put down the standard 15-25% most HML and private lenders prefer. Our terms would have to be on the strength of the deal and our putting in what we have. Are there any HML or private lenders in New England that are willing to fund a very high LTV for the right deal? Conversely, what kind of terms would persuade a private lender to put up the 15-25% in exchange for second lien?

[Charlie MacPherson]

@Tyler L. You might consider an FHA 203K. 96.5% LTV. You can borrow funds to cover both the purchase and renovation costs. Fannie Mae also has one called HomeStyle.

HOWEVER - you must owner occupy for a year, unless there are special circumstances.

[Tyler L.]

@Charlie MacPherson that'd be a great strategy for the future, but not currently. I need to remain in downtown Boston for at least the next 2 years, where prices have a floor of $500k and anything in a decent neighborhood is $800k+. Down the road I'd shoot to house hack just outside of Boston, but my option is strictly flips for right now (possibly BRRRR depending on Mortgage options)

[Matthew G.]

@Tyler L. If you don't have the capital to put the required down payment and cover rehab costs, you are going to want to find an equity partner who can. The idea of no money down and using other people's money is possible, but without experience and an existing relationship with the lender will be very difficult.

[Andrew Syrios]

At that LTV range, your best bet is private lenders; ma and pa types who are sick of getting 0.3% in a CD. We offer ours 8-9% interest only with a first position trust deed/mortgage.

[Charlie MacPherson]

@Tyler L. In that case, look south.  Norfolk, Bristol and Plymouth counties are where you'll find lower prices and better rent:price ratios.

Everything I've seen says that lenders want 70% to maybe 75% LTV. You might talk with local lenders like Eastern Bank and Rockland Trust to see whether there are any portfolio loan options.

The fact that you don't have a lot of experience under your belt might be a problem though.

[Charlie MacPherson]

@Tyler L. You might consider using the MBTA commuter rail, which should work well for much of downtown Boston.

Go to https://mbta.com/trip-planner Enter your start and end locations and it will give you options for public transit.

If that works for you, you can start looking further outside the city where prices are much more affordable.