Funding my own repairs.. better idea?

I know the ideal that’s taught is to use someone else’s money completely. But other people’s money comes at high interest for these short term loans. I’m willing to do that for the purchase price.

But what about repair money? Since I have about $25K at my disposal, wouldn’t it be better to borrow from myself at zero interest or paperwork for the Repairs fund? It just seems to me that whether borrowing from a bank or myself, either way there’s risk… but with my own money, no hefty interest attached. What do you guys think?

No do not use your own money! I have been doing rehabs for two years and I have made a few mistakes and using my money was one of them. Typically $25,000 is not a lot when your doing a rehab. You want to save your money for a back up fund if anything goes wrong. Typically hard money lenders will want to see that you have a reserve fund to pay them and lenders are more likely to lend you money when you already have money.LOL Get the loan up front and use your money for any cost over runs.

On my current rehab I spent 1 month dealing with banks that DO NOT like rehabs, they are more apt to invest in new construction. Another month was spent talking to Mortgage brokers and the last month working with HML and we were almost broke. We got our deal approved this week and we should close soon.

You still have to buy right and work off a realistic budget. My budgeting has been pretty good and I have been very close. If you buy right then paying the HML is not a problem. Typically time can work against you.

There are also some fix and flip programs that will not accept you if you purchase the property with out them. This can open up some issues with some banks and loan companies concerning the seasoning of the loan. They like to see the original mortgage in place for a year before they lend any additional money on it.

There is still a lot me to learn, you can learn from my mistakes.
Good Luck!

Considering what you said, what are the best questions to ask a potential hard-money lender when shopping for one? Also, is holding the property for less than a year going to be a big obstacle on every sale to find a buy who qualifies for a loan?

The biggest questions that I have had are what are the points and to a lesser extent what is the interest. You want to be rehabing the property for as little time as possible. Try to find a HML in the area that you are working in. Many of the lenders that I contacted live a long way from ND. Some of them required that you fly them to the site to inspect the property before they would “risk” the money. Some will require an appraisal before they would lend. It would be much easier if the person would only have to drive accross to inspect. Another question is whether or not they fund the amount up front or require a Draw during certain phases of construction. I personally would have a very difficult time putting all of the money up front if I were in their place. My goal is to work with the same group of lenders and build a working relationship with them.

Where are you located? It is also very risky going into a rural area for comparables on the appraisal. I do want to emphasis that there is good money to be made in rehabs. Holding the property for less than year is typically not a problem if you make significant improvements to the property. Our market has seen a 9% increase per year over the last three years, it has also been undervalued for many years.l


I live in Connecticut. How do I find a hard money lender that will work with beginners and no money on hand investor.

Thanks Auggflo

You may want to try some bird dogging to build up some equity? It is very tough but not impossible to get funding when you have nothing to lose. Another option is to find a fix and flip property to get some cash flowing. Here are some links of sites that lend in different parts of the US. One other issue that you may have is the amount that you borrow, many HML do not lend for under $50,000. There are several individuals that actively participate in the forums, they are not allowed to advertise there services because of the forum rules. They typically have an active link for their email address, just email them directly.

Follow the rule that I have read here many times "You make the money when you buy not when you sell’.


Go get up!

Hi ND Investor

Have you used any of the companies that you listed?


Southern California