total rehab?

Question

I was looking at a property in a very desireable neighborhood in my town, I can get the house for 60k and the owner will hold 50k of the mortgage, there is however around 35k of work that needs to be done in the home--when done the home should apraise at around 150---here is my dilema, this can be a good flip, however this area is rapidly apreciating and I can get around 800 a month positive cash flow by renting---how can I get a loan for the down payment/closing and repairs?
Joe

Scott Miller · Answer

With a purchase price of 60K and rehab estimates of 35K, you would need a hard money loan that would allow for 65 to 70 ARV.

I am aware of programs that allow for a minimum loan amount of 30K with min. ARV of 50K; so the loan size is not really a concern.

There is a rehab loan program that allows for 30 year loan maturity for those that fix and hold/rent, but the rates can be improved upon by doing a cash out refi after rehab (rather then holding a rehab loan to term).

Regards,

Scott Miller

Ryan Webber · Answer

You will be lucky to get a Hard Money Lender (HML) to loan over a year.  Normally its 3 months to 1 year.  If you plan on keeping it, you can refinance with some type of conventional financing in that time period after the repairs are done.

Joe Guz · Answer

well, the home will apraise between 145-155k, I have comps on the street and I brought my realtor--Now for a HML, how long can I get the loan for?  ie 10yrs 15yrs 20 yrs etc.?