I am looking to purchase my first house to flip.
I have little equity, but very good credit score (over 700)
The house will be about 530k, and I would like to put another 150k into renovating it.
Would a hard money loan be my best bet to get the full 680k?
Thanks for your help!
Most HML’s will only go up to 65-70% ARV, you may consider a construction(rehab) loan through a tradional lender, or you may have to find a private lender, or partner.
Bank of America, Chase, GMAC, Wells Fargo, Countrywide, and some others all offer rehabilitation loans or purchase plus loans.
The problem with your situation is that they all require some sort of investment on your part. Credit is good for you then you may need to find some private financing to help you out.
Check with family members to see if they are willing to invest with you.
Check your figures though. If your acquisition is $530 and the renovation is $150, how much will you sell it for? how much interest will you pay during the rennovation and time to sell?
You may be able to get a commercial interest only line of credit to do the rehab if the numbers are right.
Thanks for the responses. As you mention, my biggest concern is going to be the interest rate I can get on the loan. Since I have little equity, I am thinking maybe trying to wholesale would be a better option.
The home is in an area where houses sell at over 1mil. I am reconfirming with my agent now that it will not be unreasonable to ask over 800k.
I have tried to get a hold of investors that would buy this from me to get min requirements for their profit, but have been unable to so far. Would it be easy for me to find an invstor to flip the contract to if say they put in 150-200k and saw a 40-80k profit?