Needing suggestions for rehab funding
Looking for suggestions...so, relatively new investor here, we have about 6 units total. Our newest acquisition is our first to do with private money lenders. We had planned on using hard money to fund the rehab, but now the hard money lenders we have spoken with won't fund the rehab as they don't want to be in 2nd position. They would be in 2nd position because our private money lenders are in 1st position. We bought this to do a form of the BRRRR strategy, so the end goal is to 100% cash out refi.
Right now, the numbers look like this:
50k Purchase Price
50k rehab (probably less, but estimated high to cover margin of error and surprises)
140k ARV
110K All in rehab, closing costs and refi costs
This should allow us to cash out 100% with an 80% LTV refi loan. I'm a Realtor, and I have a good pulse on the local market as this is the market I work in. Also, I have a good friend that is a GC that has helped me with the rehab estimation and he will be handling the rehab itself.
So, any ideas on what we should do to fund the rehab? One idea I had was to just go ahead and refi with a construction loan, is that possible? Any other ideas? Thanks!