Hello, I buy SFH in erie county, NY. My last two projects I purchased and repaired w/my own funds. I later refinanced them and they are currently rented. I would like to continue rehabbing in this area w/o tying up all of my funds. I am familiar w/how the hard money lender programs work. However I am not familiar w/how traditional (conventional) rehab loan programs work. Can someone please educate me. What I am looking to do is purchase a SFH that needs repairs and hold for a rental or re-sell depending on the situation. but I am mostly looking to hold for rental income. Ex. Purchase price $17,500, repair cost approx. $10,000. ARV $55 - 65,000. Assessed value $59,000. My scores are around 640 - 660. No negs, just high DTI ratio. Thanks in advance for your help.
My mortgage broker will finance me 90% of the ARV. That means in your example I assume the house has an ARV of $60k he will give me $54k. There will be two closings. The first will give the seller their $17k to acquire the house and the rest in escrow. As I make repairs, I get reimbursement draws from the mortgage company. When the repairs are completed I “refinance” with a conventional mortgage company to get out of interim lending. The fees are high but I preserve my cash. They require 660 credit score minimum.