Need rehab funding for a St. Louis duplex, denied by a contractor lender. What would

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Need rehab funding for a St. Louis duplex, denied by a contractor lender. What would

Steven Lester Haskins
Member since 2026 · 30 posts · 8 votes

Hi everyone,

I own a two-family property in St. Louis, MO that needs about $50,000 to $55,000 of interior rehab before it can be rented. A licensed contractor gave me a written estimate of $52,338.75. The work is flooring, electrical, doors, stairs, balconies, and a full renovation of both bathrooms.

Where I stand:

- I own the property and it has a first mortgage.

- A St. Louis nonprofit (St. Patrick Center) has given me a conditional commitment to place residents in both units once the property passes inspection, so the rent is lined up.

- I plan to refinance with a DSCR lender once the rehab is done.

- I applied for contractor financing and was denied because of my credit. I have a steady income, but my credit score is right at 600.

- I am pursuing city and state housing grants, but those take months and may not pay for work already done. Right now, I owe around $175k on the property at ARV will be $325k. The rents will be $1250 per month. My mortgage payment is $1057 per month. I presently have a 3.25% interest, so I do not want to lose that. Ideally, I would like to borrow separate for contractor draw.

My question is simple: how do you fund a rehab like this when your credit is the problem and the property is the strength?

I would like advice on:

1. Hard money or private lenders in the St. Louis area who lend on the property's value and not on credit score.

2. Whether I should look for a partner with equity or credit, and how to structure that fairly.

3. Whether I should phase the work, doing the most important items first.

4. Anything you wish you had known before doing this.

If you lend in Missouri, or have done a deal like this, I would be glad to hear from you here or by private message. I can share the contractor estimate, the nonprofit letter, and the numbers with anyone who is serious.

Thank you in advance for any help.

1Reply
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Most Popular Reply

BJ Everson
Realtor · Columbus, Franklin County · Member since 2026 · 106 posts · 31 votes
4d

Steven, that 3.25% mortgage is worth protecting, so I'd avoid any solution that refinances it away. On your numbers, $175K owed plus about $52K of work is roughly 70% of a $325K ARV, so there's room for a second-position option or a HELOC-style product if one fits your situation. On phasing, I'd ask the contractor to break that $52K into line items, then split it into three buckets: (1) life-safety and code items, plus anything keeping a unit from being rentable; (2) items that raise rent or cut turnover; (3) cosmetic. Fund bucket 1 first, let the rent it produces build reserves, and bid bucket 2 separately. A single lump-sum estimate is also a good reason to get a second, line-itemized bid. The gaps often show where the number can come down.

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  • Mayo GilfurtPro Member
    Real Estate Consultant · Connecticut Ct · Member since 2026 · 166 posts · 35 votes
    5d

    Good morning, Steven,

    I came across your post regarding the rehabilitation financing needed for your duplex in St. Louis.

    My name is Mayo Gilfurt, and I'm with Gilfurt Capital, a commercial and business-purpose real estate financing brokerage.

    After reviewing the details you provided, I understand your objective is to secure approximately $50,000–$55,000 for renovations while preserving your existing 3.25% first mortgage.

    Before discussing potential financing structures, I wanted to clarify two items:

    1. Is the property strictly an investment property, or do you currently occupy either unit?

    2. Is the projected $1,250 monthly rental income for both units combined or for each unit individually?

    These details would help determine whether the transaction falls within the types of financing we can evaluate.

    I appreciate your time and look forward to hearing from you.

    Best regards,

    Mayo Gilfurt

    Gilfurt Capital

    Commercial & Business Lending

    0Reply
  • Steven Lester Haskins
    OP
    Member since 2026 · 30 posts · 8 votes
    5d

    Hello Mayo,

    The property will strictly be an investment property. At one point I lived in the property for several years and started a rehab project for tax abatement but never finished the work. When I relocated to Virginia my goal was still to keep the property. I reached an agreement with St. Patricks Center to allow them to rent to the homeless and veterans. I needed to get the property rehab work done and to renew the tax abatement. The rental income for each unit will be $1250 per unit working with St. Patricks and would be around $1350 per unit if I were to pursue the open rental market. Since I am now living in Virginia I would rather let St. Patricks rent to whom they see who needs the property and I handle any maintenance related issues through property management company. The estimate from the contractor is around $52k for all of the remaining work interior and exterior. I would like to actually borrow $60k for any contingency related costs.

    0Reply
    • Mayo GilfurtPro Member
      Real Estate Consultant · Connecticut Ct · Member since 2026 · 166 posts · 35 votes
      3d

      Hi Steven, thank you for providing those additional details. Based on what you've shared, there may be financing options available to help complete your rehabilitation project while preserving your existing mortgage.

      I'd be happy to review your situation and explore potential solutions for your $60,000 funding request. Feel free to send me a direct message here on BiggerPockets, or contact me directly using the information below.

      Mayo Gilfurt
      Gilfurt Capital

      Commercial & Business-Purpose Financing

      📞 860-833-0101

      ✉️ [email protected]

      0Reply
  • Bill Faber
    Member since 2026 · 16 posts · 1 vote
    5d

    You have a good starting point with the property equity and planned rental income. We work with multiple lenders and may be able to help explore options for funding the rehab while keeping your existing first mortgage in place. With a 600 credit score, the property details and loan structure will be important. Feel free to email [email protected] to discuss the project.

    0Reply
  • Devin PetersonBusiness Member
    Lender · Sarasota, FL · Member since 2022 · 2k+ posts · 682 votes
    5d

    Look for a partner with investor and reno experience that has slightly better credit to go into a C2P pr hard money-to-DSCR type program. I would look for national brokers who focus specifically on this product as opposed to just local banks who are less creative.

    [email protected]860-538-3672
    ProAlpha Capital55 Reviews
    WebsiteView Page
    0Reply
  • Nyisha Walton
    Lender · Houston, TX · Member since 2026 · 119 posts · 35 votes
    5d

    Steven, keeping that 3.25% first and funding the rehab separately makes a lot of sense, and helping investors find asset-based money like this is exactly what I do. I also work with a network of private and hard money lenders, so if I'm not the right fit I can connect you with someone who is. Have your contractor bid, the ARV support and the nonprofit tenant letter ready, since lenders who look at the property instead of credit care most about the exit plan. Message me the basics and I'll point you to the right person.

    0Reply
    • Steven Lester Haskins
      OP
      Member since 2026 · 30 posts · 8 votes
      4d

      Hello,

      My contractor is ready to start. Ideally, I told him December 1st which would give me enough time to hopefully find the money with the best terms. Just for contingency cost I am looking for a loan of $60k and refinance next year with approved credit. The ARV is around $325k, that was two years ago. I have had the non-profit tenant letter for almost two months. I am honestly trying to stay away from hard lender money. I don't want all of the money eaten up with absurd interest rates and fees.

      0Reply
  • Robbie Garvey
    Member since 2026 · 9 posts · 1 vote
    4d

    Hi Steven, I saw your post about rehab funding for your St. Louis duplex. Since you own it, the numbers and the tenant commitment may matter more than the credit score alone. I may be able to point you in the right direction. Are you still looking for help?

    0Reply
    • Steven Lester Haskins
      OP
      Member since 2026 · 30 posts · 8 votes
      4d

      Hello,

      Yes, my contractor is ready and I am trying to find money. I am trying to stay away from Hard Money Lenders just because the interest rate can hurt me pretty bad before I can be in position to refinance next year.

      0Reply
  • BJ Everson
    Realtor · Columbus, Franklin County · Member since 2026 · 106 posts · 31 votes
    4d

    Steven, that 3.25% mortgage is worth protecting, so I'd avoid any solution that refinances it away. On your numbers, $175K owed plus about $52K of work is roughly 70% of a $325K ARV, so there's room for a second-position option or a HELOC-style product if one fits your situation. On phasing, I'd ask the contractor to break that $52K into line items, then split it into three buckets: (1) life-safety and code items, plus anything keeping a unit from being rentable; (2) items that raise rent or cut turnover; (3) cosmetic. Fund bucket 1 first, let the rent it produces build reserves, and bid bucket 2 separately. A single lump-sum estimate is also a good reason to get a second, line-itemized bid. The gaps often show where the number can come down.

    1Reply
  • Steven Lester Haskins
    OP
    Member since 2026 · 30 posts · 8 votes
    4d

    Thank you for the feedback. The contractor di break down the costs for me. He did not add any contingency in it so for protection and to make sure I have the funds I am requesting $60k. I am in agreement I will never see 3.25% again so I want to make sure I the loan I get is a standalone and does not jeopardize the 3.25%. I want also the leverage to refinance out of the $60k or just flat out pay it off in two years. In my situation I know it will be a considerable higher interest rate but I need to get it done.

    0Reply
  • Justine Sanchez
    Member since 2020 · 26 posts · 3 votes
    4d

    Steven, I'm a lender, and a standalone rehab loan on a property you already own, with the rent already lined up through the nonprofit, is something I can help with. Since you want to keep your 3.25% first mortgage untouched, the structure to look at is a separate loan behind it, and you'll want to confirm your first mortgage doesn't prohibit a second lien before anything gets signed. Any lender will want the line-item contractor bid with the contingency included, the nonprofit placement letter, your mortgage statement and an as-is value, so having those ready speeds things up. Your $60K plus the $175K you owe comes to roughly 72% of the $325K ARV, which is a workable picture on paper. Has anyone appraised the property yet, or is the $325K your own estimate?

    0Reply
  • Steven Lester Haskins
    OP
    Member since 2026 · 30 posts · 8 votes
    4d

    I received an estimate of what the ARV would be if completed but that was a few years ago. The property has basically sat until now. I guess I can call my bank to provide a document stating that it is ok for me to have a 2nd on the mortgage. Attached is the quote I received from the contractor. Will this be sufficient or will revisions need to be made?

    • Hopson Home Improvement Co.

    • Business Number

      314-919-7573

    • Estimate

      146

    • Date

      Oct 28, 2026

    • Total

      USD $52,338.75

    • To

    Steven Haskins

    • 2612 Ann Ave

    • Saint Louis , MO

    • 63104

    Description

    Rate

    Qty

    Amount

    Labor- Flooring
    Install luxury vinyl flooring up/down stairs (approx. 1575 sq ft total) $6.25/sq ft

    $9,843.75

    1

    $9,843.75

    Labor - Baseboards/Crown moulding
    Install all baseboards up/down stairs
    (Approx. 225 LF total) $5/ LF
    Install crown moulding /prime and paint
    (Approx. 180 LF) $6.50/LF

    $2,295.00

    1

    $2,295.00

    Labor - Wall finish
    Sand walls as needed
    Prime/paint walls
    (Up/down stairs)

    $4,000.00

    1

    $4,000.00

    Labor - Electrical
    Complete any unfinished circuit installation
    Install all outlets/switches
    Complete a/c wiring
    Complete sub panel installation
    Install light fixtures
    Install smoke/carbon monoxide detectors
    Add outlet for dishwasher
    Install exterior lights/outlets
    **MATERIAL COST $2700.00**
    **LABOR COST $4300.00**

    $7,000.00

    1

    $7,000.00

    Labor - Miscellaneous
    Correct joist holes in brick
    Correct/weatherize windows
    **This covers all small unmentioned necessary repairs**

    **MATERIAL INCLUDED**

    $2,500.00

    1

    $2,500.00

    Labor - Doors
    Install interior doors (10) ($200/ door - 6 panel solid core )
    Remove existing exterior doors
    Install new exterior doors (3) ($500/door -fiberglass w/window)
    Install knobs ($100 for knobs)

    **LABOR COST** - $3000.00
    **MATERIAL COST** - $3300.00

    $6,300.00

    1

    $6,300.00

    Labor - Stairs
    Correct concrete stairs outside
    Repair and refurbish interior stairs

    $5,500.00

    1

    $5,500.00

    Labor - Basement partition
    Frame partition in basement
    Drywall/sand/finish

    **MATERIALS INCLUDED**

    $3,400.00

    1

    $3,400.00

    Labor - bathroom
    Complete up/downstairs bathrooms

    $8,500.00

    1

    $8,500.00

    Labor - Balcony
    Replace any warped deck boards
    Paint/refresh decking/and overhang
    (Up/down stairs)

    **MATERIAL INCLUDED**

    $3,000.00

    1

    $3,000.00

    Subtotal

    $52,338.75

    Tax (0%)

    $0.00

    Total

    USD $52,338.75

    Any work performed to alter, add to, etc by personnel not affiliated with Hopson Home Improvement Co will void all work done previously and void all responsibility from Hopson Hopson Home Improvement Co**

    **This job requires 1/3 down deposit to set start date, all material will be purchased with 1st deposit

    Deposits are non-refundable**

    **All taxes according to current Missouri state sales
    taxes**

    **All permits /specialist/consultations necessary to perform work are at the expense of the client**

    **All balances should be paid within 3 business days of completion of work**

    **If contract shall be terminated for any reason, the client shalll give Hopson Home Improvement Co (1) full week (7days) to remedy any issues before full termination**

    **This job is guaranteed by Hopson Home Improvement Co and includes (1) year of maintenance on anything installed by said company (additional material is at the cost of the client unless found to be negligence of Hopson Home Improvement Co, labor is free granted no one has touched , tampered, fixed etc said area of repair/ touch up)

    ** $17446.25 deposit to set start date**

    0Reply
  • Erik EstradaBusiness Member
    Lender · Member since 2022 · 6k+ posts · 1k+ votes
    4d

    Hey Steven,

    Doing a mid-rehab loan will be difficult. Many lenders will want a full story as to why you could not finish the project. They will also want to verify that you are in a great position to finish (high credit, experience, reserves).

    1. Hard money or private lenders in the St. Louis area who lend on the property's value and not on credit score.

    You may want to pitch this deal to local investors and share some of the upside on the refi exit.

    2. Whether I should look for a partner with equity or credit, and how to structure that fairly.

    A partner that can contribute cash and credit to finish the project will be the path of least resistance.

    3. Whether I should phase the work, doing the most important items first.

    Get the property ready for an appraisal. Focus on making sure the home is in livable condition.

    [email protected]818-269-7983
    LuxePrivate Investments LLC 572 Reviews
    WebsiteView Page
    0Reply
  • Steven Lester Haskins
    OP
    Member since 2026 · 30 posts · 8 votes
    4d

    Hello,

    Yes, I understand. I was out of work for two years and it killed my credit rating. I was initially going to sell the property, but I ended up getting a high earning job but unfortunately the job is in Virginia. So, I am working on rebuilding my credit, utilize my partnership with St.Patricks, and start my goal of buying commercial real estate. I really need this to do well because it will be the springboard to other opportunities. I have not been able to land an investor with cash and credit who can help with this deal. It would be nice. I can pay them monthly and refinance when my credit is in better shape then give them additional 10%. It is still small money to some of these guys but technically it is a small project, and they would have to do nothing, just collect a check.

    0Reply
    • Justine Sanchez
      Member since 2020 · 26 posts · 3 votes
      3d

      Sorry to hear about the two years out of work, that's a tough stretch, and being upfront about it helps. Your quote is a solid start since it's itemized with a full total. I'd add a rough timeline and a small contingency, and hold off on that non-refundable deposit until the funding is actually lined up. An updated as-is value will carry more weight than the older ARV, and the note from your bank about allowing a second will matter to any lender or partner. Offering monthly payments plus a share at the refi is a reasonable way to pitch a partner, just get the terms in writing with an attorney. If you need funding for this one or future projects, I'd be more than happy to connect further.

      0Reply
  • Marc Del Priore
    Lender · Philadelphia, PA · Member since 2024 · 61 posts · 17 votes
    4d

    Steven, the piece most people will miss is that you are not asking someone to replace that cheap first mortgage, you are asking for a small second position to finish a job that is already more than half done. With roughly $175k owed, about $52k still to spend, and a $325k ARV, the combined position lands near 70 percent of value, which is exactly the kind of spread asset based private money looks for. Credit near 600 will close some doors, so expect the conversation to center on the voucher rents, the nonprofit placement letter, and a clean draw schedule tied to inspection. Phasing the contractor bid and adding a contingency line will also help, since his estimate has none built in. I am Marc with Royal Partners, and if you DM me the address, the exact first mortgage balance, and the per unit voucher rent, I will run straight numbers on what a second position could look like.

    0Reply
  • Mayo GilfurtPro Member
    Real Estate Consultant · Connecticut Ct · Member since 2026 · 166 posts · 35 votes
    3d

    Hi Steven,

    Based on the information you've shared, preserving your existing 3.25% mortgage while securing separate renovation financing may be worth exploring.

    A second-position renovation loan or private financing arrangement could potentially accomplish that, depending on the property's current value, available equity, credit requirements, and lender guidelines.

    The projected rental income and nonprofit placement commitment are encouraging factors, although lenders will still need to evaluate the overall transaction.

    Before considering a refinance, I would compare the cost of separate renovation financing against the long-term benefit of retaining your current mortgage.

    Wishing you success with the project.

    0Reply
  • Muyees Ayilara
    Lender · Boynton Beach, FL · Member since 2026 · 199 posts · 81 votes
    3d

    Steven, this is actually a good deal, you just have a credit problem, not a property problem. Do not lose that 3.25% rate.

    Here is how I would do it if I was in your spot:

    1. Hard money for the rehab only. You owe $175k, ARV is $325k, so you have $150k in equity. A St. Louis hard money lender will lend on that ARV, not your 600 score. You want $55k to $65k for rehab plus closing costs, interest only for 6 to 9 months. You do the work, you get the nonprofit inspection passed, you get it rented. Then you refinance with DSCR and pay off the hard money. That way your first mortgage stays at 3.25%.

    2. Do not bring in an equity partner unless you have to. If you give up 30 to 40% of a $325k property for $55k, you will regret it later. A partner makes sense only if no lender will do it. If you do bring one in, do it as a loan, not equity. Pay them 12 to 15% interest for 6 months plus a small fee, get a written payoff date. Keep the house.

    3. Phase it, but do it smart. You cannot get the nonprofit to place residents until you pass inspection, so you have to do everything that is inspection related first. Flooring, electrical, stairs, balconies, bathrooms. That is all inspection stuff. Do not split it into two phases if it delays the inspection. Do it all at once if you can get the $55k.

    4. What I wish I knew: Get the DSCR lender to pre-approve the ARV deal BEFORE you start rehab. Have them tell you what rent and what appraisal you need to refinance. You already have the nonprofit letter and the $1,250 rent, that is huge. Get it in writing from the lender so you are not stuck with hard money after rehab.

    If you want, send me the contractor estimate and the nonprofit letter. I can look at the numbers and tell you if the DSCR refi will work at $325k ARV. You are close, just do not refinance that first mortgage.

    0Reply
  • David Sheets
    Member since 2026 · 7 posts · 1 vote
    3d

    Steven, the contractor lender said no because of your credit, but that's not the only way to fund this. I work with a lender whose rehab loans don't depend on your credit score. They look at the property, your equity and the plan. You already have what they want to see: a licensed GC's written bid, a two-family you own, and a nonprofit ready to place tenants once it passes inspection. That's a clear path to the DSCR refinance you're planning. Before you agree to a $60K personal loan with a $9,000 payoff fee, apply with us and I'll show you what this lender will do: https://sixtyfourwest.com/term-sheet-screener. Or reply with the address, what you owe on the first mortgage, and the GC bid, and I'll take it from there. Dave Sheets, SixtyFour West Capital

    0Reply
  • Anthony Smith
    Real Estate Agent · Detroit, MI · Member since 2016 · 115 posts · 57 votes
    1h

    Steven, protect that 3.25% first mortgage — everything else is secondary. On your numbers you have room: $175K owed plus $60K of rehab money is about 72% of a $325K ARV, which is a workable picture for a second-position or standalone rehab loan from an asset-based lender, especially with the nonprofit's placement commitment in writing. That letter is worth real money in the conversation — it answers the lender's exit question before he asks it.

    On phasing: get the contractor's scope broken into phases tied to the inspection. Life-safety and whatever the inspection requires to pass comes first, because rent can't start until the units pass. Cosmetics that don't affect the inspection can wait for rent to start funding them. A phased scope also lets a lender fund in draws instead of one lump, which makes a smaller, credit-light loan easier to say yes to.

    One caution on the partner route: a credit partner solves the loan problem and creates a governance problem. If you go that way, paper exactly who decides, who gets paid back first, and what happens if the refi doesn't come. More partnerships die on unwritten expectations than on bad numbers.

    0Reply
  • Ty Burns
    Lender · Salt Lake City, UT · Member since 2013 · 151 posts · 22 votes
    29m

    Protect that 3.25% first no matter what. On paper you've got room for a standalone second: roughly $175k owed plus about $60k of rehab money against a $325k ARV is still in the low 70s, and the St. Patrick Center placement letter is what asset-based lenders actually care about more than a 600 score.

    Two things I'd lock down before anyone writes a term sheet. Get an updated as-is value, not the two-year-old ARV, and confirm in writing that the first mortgage allows a junior lien. Hold off on that non-refundable contractor deposit until funding is real. I'd also get a DSCR lender to tell you what rent and appraisal they'd need on the exit before you start draws, so you're not stuck paying short-term money longer than planned.

    I do DSCR and second-position investor loans nationwide. If you want another set of eyes on the bid, the nonprofit letter, and how a second would sit behind that first, feel free to message me.

    0Reply
  • Steven Lester Haskins
    OP
    Member since 2026 · 30 posts · 8 votes
    2m

    Thanks Ty, how do I get an official updated as-is value and ARV?

    0Reply
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