Lending only Purchase Price for a flip?

Question

Hey everyone I am expanding my REI business and I have done 5 flips in 3 months. I am speaking with lenders on getting loans for my next big push this upcoming year and I can't seem to find anyone who just does the purchase price and let me complete the rehab with my own dollars. I tried one of the 5 the normal way with everything almost funded but it was a huge pain with the drawers (they deposited with checks for some reason so it took an additional few days to get the funds) and I had to deal with a super lame system to even get the drawers sent over. This slowed down my flip considerably and increased my cash in the deal as I had to bridge the money for my crew while waiting for a banker to go to a bank and deposit a check.

Is this an industry standard? I am using my own cash completely to help me acquire deals and I am looking for a lender to come in after I already got everything lined up so I can close in a few days and get my cash back in the following few weeks.

Kevin Ivey · Answer

I agree draws and all the paperwork is a pain.  I have worked with certain lending & a regional hard money lender here in Seattle multiple times with no rehab funds.

Account Closed · Answer

Sorry for the confusion out of the 5 flips 4 were out of pocket the 5th was the lender that was a huge pain and now for another project he will only fund if the rehab is part of the loan. It put me in a bad spot as the turn around time was 7 days for the money and I payout weekly to everyone I work with. I also don't want to pay interest or points on money I don't need or want.

Joe S. · Answer

Your post is a bit confusing. On one hand you was saying you want to do the rehab fix up out of pocket and then you turn around and complain about it taking a few days to get the draw money from banks. If you was loaded with enough money to do the rehab out of pocket how is taking a few extra days to get the draw money from the bank a big deal? Just trying to figure out exactly what you’re saying. By the way five flips in three months Is nothing to sneeze at. That sounds pretty impressive. :-)

Account Closed · Answer

okay good to know! Ill keep looking.

Dell Schlabach · Answer

We use these guys when we run short of private money. Typically we will just get the purchase money and use our own funds for rehab so we don't have the draw issue.

Their draws are typically 4-5 day turn around from time you order them.

https://www.fundthatflip.comthey can easily close in two weekswe have done a few in 7 days or less

I would suggest using them to close when you buy, rather then using your cash and refinancing, otherwise you basically have to reclose the loan, it adds a few k in fees.

They can easily close in two week, we have done a few in 7 days or less when need called for it.

Good luck

Will Barnard · Answer

These lender withholding / construction draws are a pain no matter which lender it is. It may be best to find a lender that will fund your acquisition without the rehab and use your cash for that. There should be a lender out there for such a transaction for you. If not, perhaps you can submit your draw requests in advance knowing they take 7 days. I have had draws not take 7 days so some lenders will be faster than others. Another option is using private money to fund these deals.

Joe S. · Answer

You are saying the pay out from the lender is around seven days and you pay your guys weekly. So in one sense you’re saying that you need the lender to process and to pay the rehab draws to you faster. And then you’re saying that you don’t need the lender to pay you any rehab money you got it covered. Which is it? 🧐🤓

Lending only Purchase Price for a flip?

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