Seeking private capital rehab loan for property im buying cash

2 Reply

Jonathan KlemmBusiness Member

Moderator

Contractor · Chicago, IL · Member since 2016 · 4k+ posts · 2k+ votes

Quote from @John Sydney:

Looking for Rehab-Only Financing Advice

I’m currently under contract on a single-family fix-and-flip in the Chicago area. I’m purchasing the property with cash, so I don’t need acquisition financing. What I’m looking for is a lender that will finance only the renovation costs after closing. I found this deal myself off market direct to seller with no assignments so the price is very good.

Purchase: $30,000.00

Rehab: $87,000.00

ARV: $200,000+

A little about me:

680 credit score
No completed flips in my own name yet
10+ years of experience in residential remodeling
General Contractor and Project Manager by trade
Comfortable managing full gut rehabs and overseeing subcontractors

The numbers make sense, and I’ll own the property free and clear at closing. My challenge is finding lenders that are willing to fund just the rehab portion without requiring that they also finance the purchase.

Has anyone here successfully used a lender for a rehab-only loan after buying a property with cash? If so:

Which lenders have you used?
Do they lend based on ARV or current value?
Are there any lenders that work with borrowers who have strong construction experience but limited track record as a principal investor?

I’d appreciate any recommendations or advice. Thanks in advance!

I've got a great connection at Renovo @john sydney if you want me to make an intro let me know.

Maybe also check with @cam shwartz with Vert capital. I can make an intro there as well...bp @ feature isnt work so not sure hell see this.

[email protected]

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Crystal SmithPro Member

Moderator

Real Estate Broker · Chicago, IL · Member since 2014 · 2k+ posts · 1k+ votes

Quote from @John Sydney:

Looking for Rehab-Only Financing Advice

I’m currently under contract on a single-family fix-and-flip in the Chicago area. I’m purchasing the property with cash, so I don’t need acquisition financing. What I’m looking for is a lender that will finance only the renovation costs after closing. I found this deal myself off market direct to seller with no assignments so the price is very good.

Purchase: $30,000.00

Rehab: $87,000.00

ARV: $200,000+

A little about me:

680 credit score
No completed flips in my own name yet
10+ years of experience in residential remodeling
General Contractor and Project Manager by trade
Comfortable managing full gut rehabs and overseeing subcontractors

The numbers make sense, and I’ll own the property free and clear at closing. My challenge is finding lenders that are willing to fund just the rehab portion without requiring that they also finance the purchase.

Has anyone here successfully used a lender for a rehab-only loan after buying a property with cash? If so:

Which lenders have you used?
Do they lend based on ARV or current value?
Are there any lenders that work with borrowers who have strong construction experience but limited track record as a principal investor?

I’d appreciate any recommendations or advice. Thanks in advance!

I can make a few introductions to some Chicago lenders for you. drop me a direct message I can also introduce you to some private people. But here's the deal-

1. All will want first position on the property; i.e. they will put a lien on it.

2. They will check ARV and AS IS value. Be prepare to provide the property address as they will not use your numbers and a full set of pictures.

3. They will also check the chicago code violation & permit site. Many new investors think they are getting a deal at $30K, then they close and find out that the property is on the city demo list or has a ton of violations. Being on the demo list does not mean that the city will actually demo the property; it means they are watching it closely.

Do you have an architect.

312-681-7487

John Sydney

OP

Contractor · Chicago · Member since 2025 · 13 posts · 10 votes

@Jonathan Klemm Thanks Jonathan! I appreciate this.

0 Reply

John Sydney

OP

Contractor · Chicago · Member since 2025 · 13 posts · 10 votes

@Crystal Smith Thank you Crystal! I just sent you a direct message.

0 Reply

John Sydney

OP

Contractor · Chicago · Member since 2025 · 13 posts · 10 votes

@Jay Hinrichs Thank you Jay! I appreciate this advice.

Vijay FriedmanBusiness Member

Miami, FL · Member since 2026 · 766 posts · 123 votes

Quote from @John Sydney:

Looking for Rehab-Only Financing Advice

I’m currently under contract on a single-family fix-and-flip in the Chicago area. I’m purchasing the property with cash, so I don’t need acquisition financing. What I’m looking for is a lender that will finance only the renovation costs after closing. I found this deal myself off market direct to seller with no assignments so the price is very good.

Purchase: $30,000.00

Rehab: $87,000.00

ARV: $200,000+

A little about me:

680 credit score
No completed flips in my own name yet
10+ years of experience in residential remodeling
General Contractor and Project Manager by trade
Comfortable managing full gut rehabs and overseeing subcontractors

The numbers make sense, and I’ll own the property free and clear at closing. My challenge is finding lenders that are willing to fund just the rehab portion without requiring that they also finance the purchase.

Has anyone here successfully used a lender for a rehab-only loan after buying a property with cash? If so:

Which lenders have you used?
Do they lend based on ARV or current value?
Are there any lenders that work with borrowers who have strong construction experience but limited track record as a principal investor?

I’d appreciate any recommendations or advice. Thanks in advance!

@John Sydney
Sounds like you've already done a lot of the heavy lifting by finding the deal and purchasing with cash. One thing I'd double-check is making sure the ARV supports the total project cost, since rehab-only lenders will usually look closely at the after-repair value and exit strategy. Your construction background should definitely help when discussing the rehab plan with lenders. Best of luck with the project!

786-656-0387

DreamPoint Capital

Jonathan KlemmBusiness Member

Moderator

Contractor · Chicago, IL · Member since 2016 · 4k+ posts · 2k+ votes

@Cam Schwartz

[email protected]

Quality Builders4.966 Reviews

Cam SchwartzBusiness Member

Lender · Chicago, IL · Member since 2024 · 102 posts · 48 votes

[email protected]847-702-6940

Quote from @John Sydney:

Looking for Rehab-Only Financing Advice

I’m currently under contract on a single-family fix-and-flip in the Chicago area. I’m purchasing the property with cash, so I don’t need acquisition financing. What I’m looking for is a lender that will finance only the renovation costs after closing. I found this deal myself off market direct to seller with no assignments so the price is very good.

Purchase: $30,000.00

Rehab: $87,000.00

ARV: $200,000+

A little about me:

680 credit score
No completed flips in my own name yet
10+ years of experience in residential remodeling
General Contractor and Project Manager by trade
Comfortable managing full gut rehabs and overseeing subcontractors

The numbers make sense, and I’ll own the property free and clear at closing. My challenge is finding lenders that are willing to fund just the rehab portion without requiring that they also finance the purchase.

Has anyone here successfully used a lender for a rehab-only loan after buying a property with cash? If so:

Which lenders have you used?
Do they lend based on ARV or current value?
Are there any lenders that work with borrowers who have strong construction experience but limited track record as a principal investor?

I’d appreciate any recommendations or advice. Thanks in advance!

Hi John, right up our alley! Sent you a note to connect.

Thanks @Jonathan Klemm

Vert

2 Reply

Elizabeth LawrenceBusiness Member

Lender · OH · Member since 2022 · 18 posts · 7 votes

[email protected]614-714-5155

Hi @John Sydney!

Just funding the rehab cost is totally do-able, with us being a broker, we can filter down the lenders that can take on a deal under $100,000 loan size and make this happen. Would love to chat!

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Andrew Caranto

Investor · Pacific Northwest · Member since 2026 · 65 posts · 16 votes

[email protected]818-269-7983

$30k purchase, $87k rehab, $200k+ ARV, cash close, free and clear, no flips in your own name yet.

A lot of private money hates inverted stacks even when the equity looks fine on paper. They underwrite exit and principal experience harder than the GC. Rehab-only after a cash buy is possible. It's also a smaller lender pool than "we fund the whole project."

Before you shop names, lock a written scope, draw your schedule, and a hold/exit plan if ARV slips. Lenders who stretch on first-time principals usually want those three before they care about your 680.

Have you already run a local hard-money quote on rehab-only?

2 Reply

Erik EstradaBusiness Member

Lender · Member since 2022 · 6k+ posts · 1k+ votes

1w

Hey John,

This deal will be more easier to finance as a 1st position Purchase + Rehab Loan. High Reno and low purchase price is already a hard deal to finance with most lenders. Especially if you have no principal experience with similar renovations.

You might be better off getting a JV partner and sharing the upside, if your goal is to only finance the rehab after closing.

But if you will consider a 1st lien, you will need to demonstrate similar experience with other rehabs you may have completed for your clients. Providing Certs, receipts, permits, invoices, budgets, etc will help. You may be required to put a hefty down payment (maybe 30-35% down.)

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