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Author Topic: How to secure $60K on top of Hard Money Loan  (Read 2534 times)

Offline AusTex Flipper

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How to secure $60K on top of Hard Money Loan
« on: May 13, 2006, 12:39:47 am »
Need help to figure options on this deal...

Have a  complete rehab on 1 acre parcel 2900+/- sf house with lake view from 3rd story if we chose to add it.  We  paid $165K for the property. Lenders appraisal came in at $325K. We included $70K worth of estimated repairs to Rehab that brought the loan to $227,500. 70k to be drawn as work is completed. We have done 80 percent of the demo. After getting into the project we realized that we need to change the scope of the Rehab to Maximize profits. We need to Demo part of the structure add an additional 750 sf. We figure this change in scope will cost us $43k to complete that is not in our original list of repairs with the hard money lender and we don't have the extra $43K.The total sf will be  approx 3650 sf now which will  increase the value of the house around $83K. So now we have a Value of $408K.  I have a private investor that is willing to loan us $60K to cover the additional work. The hard money loan is done as a contract for deed and is in the lenders name so we have equitable title but not legal title.

Now that I have given the details...  Here is my help question...

How can can I secure the investor with this property other than a promissory note.
I can't give a second lein on property not in my name can I???

Looking for all viable ideas..that are legal.. Thanks!!!




Offline Investment Loans

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Re:How to secure $60K on top of Hard Money Loan
« Reply #1 on: May 13, 2006, 01:28:56 am »
Does the terms on the private loan blow the hard money loan away?

If not, then why not just ask the current lender to analyze the new scope of work?  Usually hml are somewhat flexible.
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Offline AusTex Flipper

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Re:How to secure $60K on top of Hard Money Loan
« Reply #2 on: May 13, 2006, 09:59:02 am »
Ben,

The rates are about the same but I would like to establish another source of capital for future projects.

Thanks for the reply!

Kevin

Offline Investment Loans

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Re:How to secure $60K on top of Hard Money Loan
« Reply #3 on: May 13, 2006, 12:54:55 pm »
I understand, having several flexible sources is important.

Most HML or private lenders will not loan in 2nd position.  There's just too much risk.

However, they would be happy to consider paying off your existing loan with the additional proceeds.  Not the best idea with the points involved though.




To Our Success!
Ben Carmona * Consultant * ALL STATES * www.BenCarmona.com * 314-914-6052
1-4 Unit Investment Properties
Hard Money Rehab Loans * 24hr/1 day double close funds * Portfolio/Commercial/Business Options * No Seasoning Refis

Offline AusTex Flipper

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Re:How to secure $60K on top of Hard Money Loan
« Reply #4 on: May 13, 2006, 02:03:14 pm »
Ben,

The private investor will take a  2nd position.  The HML has allowed us to do a 2nd with another project at the inital funding.  I'm just looking for a way to secure the PI somehow.

I guess I can call the HML on Monday to see what they will do.

Kev

 




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