I missed this deal but how could I have financed the rehab on it?
SFH in foreclosure. 75k owed owner will accept 85k.
Needs updated kitchen-everything replaced estimate 10k
ARV 160k
If I got a mortgage on the property, how would I get one on the rehab? Do banks do this? Like for example take a contractors estimate and put money in escrow for you to pay for the rehab with?
In our area both banks and hard money lenders will do those types of deals.
I have found having a commercial line of credit to be the eisiest. My banker will finance 100% upfront. Then I do the rehab and he will finance 80% of the new appraised value, using this method I have gotten $20,000 back plus my rehab expenses.
Hmm, if the owner only wants 10K from his equity, I would have done a short sale with the lender. Who knows, coulda got it for 50K. What kinda missed payments and late payments did he have as well?
I hate paying additional fees, but there are just some cases where having access to a good loan broker is worth the cost.
There is probably a bank in your area that, assuming you have fair credit (usually like 680 or better), would loan you 75% of the ARV (they would do a “subject to repair” appraisal). If your house was worth $160K and you needed only $100K (let’s roll the closing costs in there), that would have been a slam dunk.
They’d probably put the rehab funds on a draw schedule, meaning you get them only after the work has actually been done.