Searcy, AR · Member since 2016 · 20 posts · 2 votes
Hello,
We have located a house for rehabbing to start with and can get the house for 35k in a very decent neighborhood. The issue we have is the house is right next to a busy street. It is a 4/2 with almost 1900 sq ft. estimated rehab cost is about 60k. Estimated arv is 129k. Questions; 1.) would you be afraid of the house if it is close to a busy highway but in a good neighborhood? 2.) If we purchase the house with our own funds what kind of loan would we need to get for the rehab and can someone point me in the right direction about how that type of financing works? Should I use a bank or what type of source for this kind of financing? Input is greatly appreciated.
1.) If you're right about your ARV, the location is already accounted for the street. If you need to re-assess the numbers.
2.) I think you're looking for a bridge or construction loan from the bank to help cover the rehab costs. I would use a local bank and talk to them about portfolio lending.
They can structure the deal such that you only get the money you need as the project goes forward. It protects them and allows you to keep your holding costs down a little.
I've never done it, but I've arranged financing for it a couple times and had the deal fall through (knock on wood).