All Forum Posts by: Reh N.

@Nathan G.

Hi Nathan, thank you for your response. I don’t think I will dip into my reserve because I’ve been a licensed builder for about 25 years now. I’ve estimated costs and I over estimated on purpose. construction will cost 70-80k. I’ve set aside 20k for reserve. The question at hand is for the experienced investors and what they would choice and why.

@John Duclos

Hey John,

You ever end up purchasing this building? Would like to ask you some questions!

Hi BP community!

I need some input on an investment property.

Is it better to factor in my construction costs into the Hard Money OR use the cash I’ve set aside towards construction? I’m a contractor so the construction will be at cost.

Pros: 1) down payment would be much less because I would not factor in construction costs Into the HML.

2) my interest only payments would be lower.

3) have money in reserve. in case things go south.

Cons: 1) payments would be higher.

2) very little reserve cash.

FYI: this would be my first deal.

Hi BP community!

I need some input on an investment property.

Is it better to factor in my construction costs into the Hard Money OR use the cash I’ve set aside towards construction? I’m a contractor so the construction will be at cost.

Pros: 1) down payment would be much less because I would not factor in construction costs Into the HML.

2) my interest only payments would be lower.

3) have money in reserve. in case things go south.

Cons: 1) payments would be higher.

2) very little reserve cash.

FYI: this would be my first deal.

Any input would

Be appreciated.

@Marylynn B. How do you figure out there is cement down the drain being that it is really difficult to go that deep down?

@Odie Ayaga I could choose to rent both apartments and still make a little bit of cash flow. Not the main answer I’m looking for though

Hi All,

I’m also looking to purchase a foreclosure through hard money but I’d like to house hack. And I had a few questions. After rehab is completely done, I understand you need to goto a bank and apply for financing so you could pay the hard money lender off.

One of the question I have is do you have to get approved with the same process as if you were purchasing a home with a conventional loan? This wouldn’t be possible for me. Also, I will be using a contractor I’ve been familiar with for a very long time. They have a proven track record and finish projects before anticipated date. So assume I get the hard money, would I get penalized if I pay earlier? Also, will the hard money lender find me a conventional loan for this rehab project after it is done?

If they do, then what if their rates are too high? Can I goto a bank of my choice? Will I get penalized? How long will the financing process take from after the rehab project is done? Thanks!

Hi, I'm looking at taking a hard money loan for a investment property in New York. The current purchase price is $500,000 ARV: $850,000 construction: $80-100,000. What would be good in terms of hard money lending? I haven't inquired yet but I'd like to know what rates I'm looking at before executing. What rates / terms would I be looking at for a property in NYC? Just a ball park would suffice.

@Kody Thompson

It is a cash deal and have been put on auction. Not sure if I can do that. I was the winning bid but reserve wasn’t met therefore it went back on the market. I’ve been keeping my eye on it to see but currently people aren’t looking to buy a house right now.

— Now, I was wondering whether or not I should include the violations + fees on the building into account and construction costs when I get my hard money? Also, should I factor in the repayments for the money lend to me into the hard money? The house might be purchased for $450-$550k. After I do construction, transitions to a 2 family, the property will be close to $1 million.

-I’ve estimated construction will cost me $100,000-$150,000

-Violations are $65,000

If house is bought for $500k, plus what I’ll need to do to it, then it would cost me $680,000 (estimate).

Two options I’m looking at.

Purchase Just property, and pay as I go. $500,000 hard money, cash over the span of 6-9 months $150,000 excluding down payment.

OR

purchase property, factor in ALL costs into my hard money still having cash in reserve just to be safe.