I am very interested in Investing in Real Estate (rehabbing/flipping). I am a working dad, and do not have
money to invest in repairs or downpayments. I am wanting to get a loan that will cover the cost of the home, the repairs, and the mortgage while rehabbing. I have checked with some hard money lenders, but they only pay for the repairs after the home is put up for sale.
I am basically trying to do all of this with no out of pocket.
I don’t have the money to pay for rent (my apartment) and a mortgage (the rehab). Please help ! What can I do ?
Howdy Rhemalogos:
Keep looking. The best I have found will loan about 95% of the total costs including about 5 months of mortgage payments if the deal is good enough and they will let you borrow the 5% on a second lien from another lender. Ergo my byline at the bottom.
Rhem,
There are lenders out there who will loan 75% of ARV including closing costs. How is your credit?
FICO=680, the only thing is I don’t have out of pocket to pay for repairs or mortgage, I was hoping that I could get it all covered
with financing. Maybe pay the mortgage and repairs with some kind of a line of credit, but then I don’t own a home…so…? ?
I just want to get my feet wet, make a nice profit, so that with my second investment I can have the money.
Hello TED!! I am new to the site and new to REI and was so excited when I read your post to the following question! I too need a loan set up like this one Because the best I can find is a local back that will loan me 90% of the ARV on an interest only paying monthly on the note. I too am looking for a lender that will just tack on the interest at the end with the payoff of the loan so that during the rehab I do not have to come out of pocket with the monthly note.
So in regards to your reply…do banks do this kind of lending or pretty much only private investors. I have done the research and know that conventional and HML do not do this that I can see.
I would love to get my financing in line before I go looking for a property.
Thanks so much TED!! 
Howdy Michelle:
I have done bank loans where the payment was due every 90 days instead of monthly giving some time to flip the property but this was many years ago. Even hard money lenders want monthly payments and mine prefers to get it up front at least 4 or 5 months worth. Private lenders are more willing to wait on payments until the end but most probably want monthly installments to keep the debt from adding up too high. Hope this clears it up some.
Thanks Ted !!
Since I am green, could you recommend a couple of books to get me started that you like??
Thanks so much!!
IMHO, you have a missed a critical first step in your REI career; buy your own house and make it your first rehabber project. Its a GREAT way to learn the ropes. Getting owner occupied loans is MUCH easier than investment loans and if you are playing rent you are just paying off someone elses mortgage.