I am just getting started out in REI and don’t have a lot of capital, even for doing the rehab. When I look around at hard money lenders, a lot of them have a LTV from 65%-75%. I looked it up and found that the LTV is based on an appraisal of the house. Is it possible to get a REO for less than the appraisal and borrow money for the rehab for the construction costs.
Also, are there any hard money lenders that don’t require anything to be paid upfront, only once I sell the house, or say in 6 months.
???
Chris
California
Chris
With the way the credit thing is now and the house thing you are going to see even tighter lines in the hard money
And so who never charged a upfront fee will be doing so as they have no assurance as to when or for how much the rehab will sell for
As well most have become all most bankers on what they will and will not do with higher ficos needed and biger spreads on the homes
You m be better off to gt the seller if you can to sell you the home on seller finance and then use the home to get a small 2 nd for the rehab
Hey Chris,
Those terms are typical of HML's. If you're buying from an REO or anyone else, you HAVE to buy for less than the appraised value. You make your money when you buy.
- What type of RE investing are you looking for ( flip, rent,etc…)?
- What are the rehab costs?
If you’re buying rentals, you need to determine your max. purchase price by using the 50% rule. If you’re buying to flip, you don’t want to borrow more than 70% ARV.