Advice please

I am looking to try and flip house(s) in SC (Greenville area) but I have a problem. Being new to this I want to start small and hopefully work up - looking at HUD and Bank foreclosure properties. The properties I have looked at appear to have potential equity (asking price/ARV) of around $30k. I figure to come out with between $5-10k on each and would be happy with that as I have a fulltime job and see this as a way of accumulating some capital. My problem (one of them anyway) is this - I don’t have enough liquid assets to afford closing costs, downpayments etc, mortgage lenders I have talked to won’t lend unless it’s owner occupier and HML’s would not provide enough to make the purchase on the LTV ratio I am looking at (90-95% - eg purchase price 100k, ARV 130k, rehab costs 5-10k). I have enough credit to fund the rehab costs myself…where do I find the initial investment?
All advice will be greatly appreciated but remember one thing - I am a stubborn man!

Edit: Just realized I misread your post to say that the ARV was $30k. In light of the price being actually around 100k, the comments about loans under $50k don’t make a lot of sense! Hah!! that’s what I get for reading quickly!

I have a ton of trouble getting investment loans under $50k. In fact, 8 out of 9 banks my mortgage broker and I approached (even ones we’ve worked with before) flatly turned down doing a loan under $50k without even asking for appraisals or anything. I had this condo property lined up for $45k, but was unable to close because financing fell through completely. They wanted to charge almost 10% interest and get 10% down payment. Bah!!

So I bought the bigger place down the street for $68k and got 7.5% interest at 100% LTV… and ended up with a lower payment on a more expensive place, with less money out of pocket… imagine that. It just appraised for $97k after some rehab. Woot!

I spent $2000 in closing and $9,500 in rehab and it’s one of the nicest homes in the area now. Tile floor, new counters, refinished cabinets, new bathroom fixtures, new deck, new doors, etc.

Where am I going? hmm you can buy a place with zero down, provided you have great credit. I think the last 100% LTV investment loan I got was through Homecomings (though it was with a broker). You can get concessions to pay for some of the closing costs and you can close the deal with less than $2000 down (the loan I got only allows 3% concessions).



thanks for the input, for some reason I never thought of going to a broker, I suppose I just assumed they wouldn’t be interested when they found out I was looking to flip.

Mortgage brokers are just like Real Estate brokers. There are some who don’t know anything other than “Dan and Sherry want a bigger house”, but some are experts in finding investment money.

I work with one because he can hunt down a lot of loans I wouldn’t ordinarily find. I come to him and say “I need $100,000, zero down, what can you do for me?” and he’ll come back a day later and say “I found a few lenders that will do 100%. The first is at 7.5% interest but has a 2 year hard prepay, so I found this other one that wants 8.25% but doesn’t have a prepay, because I know you were looking to flip it quickly.”

Good stuff, worth the extra $700 or so that gets tossed into the expenses in every case so far… In one case, he even covered a mistake made by the lender, and ultimately, he did the deal for free after covering the expenses. So, I keep going back. :slight_smile:

It’s nice to be able to phone someone and say “get me $100k” and the next day, he has paperwork to sign.


There are a great deal of investors with your same situation. I know of large investors, owning 100 plus homes including Greenville, that work with investors and they are not hard money lenders.

In most cases, they ask for $1000 down and $300 - $700 a month depending on the property. The balloon is due in 3 months, 6 months and sometimes for those investors who performed on past deals, not making any payments late, they go a full year. Between the two investors I work with, they have 100’s of properties.

Go Get’em!
Ray Rochefort, mgr. mem.
Purpose Investments LLC