Need guidance on first BRRRR and funding

[Acaysia H.]

Hello everyone! Thank you for taking the time to read this. Firstly I want to mention my friend and I are complete beginners to investing and flipping so any help/guidance is greatly appreciated.

My friend recently locked in a contract for deed on a fixer upper property for $14k. Estimated repairs are about $10k. We are very limited on funds but we managed to gather from friends and family $6k to help rehab the property. A friend of hers told her to go to the bank and try to get funding to pay for rehab and pay off the contract however she has been denied by two banks so far and that was pretty discouraging.

(Side note: both of our credit scores are low as of right now but nothing derogatory besides high debt to be honest with whomever reads this)

Right now we feel stuck because we can’t completely rehab the property and pay off the contract with $6k. Our intentions were to fix it, rent it and pull out equity to do another. Speaking of equity, the house would be expected to have a value of $150k after repairs.

We are seeking what other avenues, ideas or anything that we may not know of to help get through this process. Also I’m questioning if we are still sol on pulling equity out of the property due to our credit scores & debt even after we repair the property?

I hope this is somewhat clear to understand. 

[John Chong]

You'll probably need more private capital from friends/family or a partner. The loan amount is too small for most banks. As long as your FICO is about a 620 you should be able to pull cash out on the refi.