All Forum Posts by: Ryan Smith

@Nasson Raymond. Thanks for the insight! I'll see if I can work that construction loan terms into my next potential deal. Paying interest only would definitely lower the expenses. Have you been able to modify the terms with your bank as you continue to do deals?

@Kelly Layne. Those are some great tips as well. I’ll see if I can work that into the terms with the lender also! Were you able to negotiate those terms on your very first deal or did you have to work with the lender for a little bit before they gave you those terms?

Thanks for the advice @Jaysen Medhurst!

@Jaysen Medhurst. Thanks for the feedback. The bank and I talked about how the funds would be allocated and the response was the draw-type of allocation. But it was more “when you complete some work then you can ask for the funds and we will transfer them”. It wasn’t quite as structured as breaking it down into different phases with a Scope of Work and getting paid off of that. I’m curious if by using a scope of work I would be tying my hands/making things more restrictive than I need to? If you don’t mind me asking, how do you structure your deals?

Hello all, newbie here and I am trying to figure out the best way to structure a rehab fund allocation with a bank. I was able to find a bank that would finance the renovation costs into the total loan cost. I am trying to negotiate the most investor friendly way to ensure that I always have funds available to pay for materials/contractors.

Below is an idea that I have drafted up. Any critiques or different ideas would be much appreciated.

75% LTV Rehab - structure rehab around a 4-payment schedule.

• First, we will create a rehab scope of work that details the rehab in 4-phases (25%, 50%, 75% and 100% completion phases).

For example:

• Phase 1. Replace windows, roof. Cost: $12,000
• Phase 2. Replace plumbing, electrical. Cost: $5,000
• Phase 3. Install sheetrock, doors, trim, insulation. Cost: $8,000
• Phase 4. Install flooring, cabinets/countertops, paint. Cost: $7,000
• As rehab is completed, the bank allots funds into account for us to withdraw and pay contractors/materials

Has anyone had a similar deal or worked something out with a bank that has helped them out in the past?

Thanks again in advance!

@Andrew Postell, thanks for the advice and heads up (I'm still very much a BP newbie).

@Daniel Gutierrez, no the plan will be to use it as a rental investment property.

Can anyone recommend a Fannie Mae Homestyle renovation loan broker in Wichita, KS? 

Thank you!

@Emilio Ramirez. Welcome to BiggerPockets from a fellow Wichita, KS newbie investor.

@Dustin Burke, thanks and good to know. From reading a couple BiggerPockets books it seems like referrals are one of the best ways to find contractors. I will continue to ask around. Thank you again for your insight.