Rehab construction cost

5 Replies

Originally posted by @Vincent Finn :

@Christopher Phillips sure, I’m closing on a property that I plan to flip. My purchase is covered, I am just trying to figure what are some ways I could finance the rehab

Is your purchase covered by another loan? If so, a HML is unlikely to lend because we want first position lien against the property.

If not, why would you want to borrow rehab money only? If you can get upfront money from a HML, why would you want to receive rehab money that is tied up in escrow until you complete rehab milestones but are still paying interest on from day one? Get a purchase loan and use that money to rehab. Rehab money is usually when you need extra on top of the purchase loan.

I just get a construction type loan from my local bank. They pay for the property plus my detailed estimate of my repairs. I just finished a flip. The house purchase was $54,500, and the bank gave me a total loan of $75,000.