Getting a Rehab/Repair loan ONLY ??

Question

I need some advice please, on If I can get a Loan on a Property, that I need $30,000 to do Repairs/Renovations on  ??

The Property when Repaired, should Appraise for around  $125,000   -  $130,000

The current  Value of the Property is right at  $35,000

My All-In costs will be around $16,000

I won't have enough $ to fix and Repair it , so I am looking for a way to get a Loan / Money to get it Repaired

Would a Bank or Lender likely lend me a HELOC type loan, based solely on the Equity that the Property will have in it ?

Thank you all for the help and input

Michael Dunn · Answer

John S.

What would be the rates and the terms for a Loan from your company, given the forementioned situation ........ (  $16,000 paid in Cash by me on the Front end + $35,000 needed to do the Rehab )

Property's ARV to come in , right around  $125,000

So , $75,000 in Equity  ( estimated )

Michael Dunn · Answer

Dennis W. ,

" Be on the Title in 1st Position " .......... This mainly means that they will want to tecnically have the full rights to the property, in the case that something happens and they have to then " own " the property , with the Repairs still needing to be completed ?

Nighi Le ,

Yes sir , the $16,000 is what I have in Cash and what it will cost me to acquire the Property

I just need right around $35,000 to do all the Rehab and Repair work .

I wasn't sure what type of Loan I could get , that would Lend based on the situation .

What type of Loan would cover both the Purchase + the cost for Rehab ?

I'm hoping that the amount of Equity in the Property, will be enough for a Lender to Lend to me , on this Property ?

John S. · Answer

Black Onyx Lending LLC gets its clients loans like this.  Look us up on the web.

Nghi Le · Answer

@Michael Dunn

It sounds like Purchase Price will be $16k, and rehab is $35k.  Most lenders won't do loans under $50k, and the only lender I know of that can will require you to have at least 20% of the total costs (purchase + rehab) liquid in your bank account or $15k, whichever is greater.

You mentioned that you only need money for the repairs; does that mean that you are able to pay for the property up front with your own cash?  If so, you can probably get a loan that covers most of the purchase and rehab costs.

Michael Dunn · Answer

Jason DiClemente ,

what would be the reason that a HML would consider loaning to me n the first place ............ Would it solely be based on the amount of Equity  ( After the $35,000 is spent on the Repairs )  that they would lend me the money?

So my Upfront/out of pocket cost will be right at $16,000  +  $35,000  needed to repair/renovte it

Total cost =  $50,000  ( rounded )

The ARV should come in at  $125,000

So is that  $75,000 worth of Equity in the Property, enough of a reason for them to feel comfortable in lending me the  $35,000  " against " the Property ?

Thank you for all of your help

Michael Dunn · Answer

Hi Nighi Le ,

I am looking to purchase the property

The  $16,000  would be all of my Upfront Costs  (  Liens, Back Taxes, Lawyer fees and cash payment to the Owner/Heir of the Property  )

I will need around  $35,000  to repair and renovate the Property

My proplem is ........... I don't have the $ on hand , to pay for the repairs/renovation on it

a HML seems like my best and likely only Bet  ?What Loan amount  ( as a minimum  )  do  HML like to see / loan ?Thank you for all of your help

Nghi Le · Answer

Is this a property you already own, or is it a deal you are looking to purchase?

Can you clarify your numbers a little bit?  Is $16k the purchase or rehab cost?

I think you can get a hard money loan on it, but it's going to be tough because it's such a low loan amount.  Expect the fees/points to cost about $3,500 since that's the minimum fee most lenders would take.  If you do have a HELOC or private money, that would be better/cheaper.