Best way to finance a rehab
My investment partner and I are looking to close on a property around $200,000 in value. We have enough capital for the down payment + closing costs (≈$50,000) but are trying to figure out how to best fund our rehab.
We are assuming a rehab cost of between $20,000 and $40,000 because we will want to add some significant value to the property before we refinance.
Is a short-term construction loan the best option? Or can we get better rates/returns by getting a little more creative?
We're looking to follow the general BRRRR method with this property and those going forward.
Thanks!
Most Popular Reply
Personally, I've had a hard time finding construction loans so I did a lot of hard money up front. Now I use almost completely private money for short term deals (ie 3 - 9 months). I offer guaranteed interest 6 - 10 % annual interest only to friends, family, business associates, members of my local service clubs, etc. I often can get loans for 6 or 8% and I never have to pay points or origination fees. I love this strategy. It helps them grow their money and helps me do a deal without so many hoops and red tape.
Best of Success!