Covering Rehab Costs

[Brandon Sturgill]

I currently have a FHA loan on a primary residence and am looking at a second property for rehab/resale. I have a lender (a local bank) willing to work with me on some pretty favorable terms, but from my initial research, it seems the majority of hard money lenders and banks that do portfolio lending offer 70-80% of appraisal or sale price (whichever is lower). My dilemma is the rehab costs, which are reasonably low, considering I am able to do the majority of the work myself. Here is my basic purchase plan: 3BR/2BA 1,300sq. ft. SFH Purchase price <$80,000 (target $75,000) at 60-70% of ARV Rehab/Resell/Holding/Fixed costs $15,000 Total loan ~$95,000 Comparables selling at $115-125,000+ So my question is how do I cover the rehab/holding costs? I have about $45,000 equity in my primary residence. Is it a decent option to do a HELOC? Or are there other/better ideas?