I’m in Sacramento, CA. I have excellent credit (751 middle) and two other properties with plenty of equity in both. I have an opportunity to buy a house in bad shape in one of the most desireable neighborhoods at sixty percent of comps’ MV. It’s my understanding that for people with really great credit, the real advantage to a hard money loan is speed. I have a heloc that I keep at a zero balance, a great job and a lot of experience with major remodels. Would it be advantageous for me to go through a hard money lender? If so, can someone point to a California hard money operation? Also, where would I look to find a rehab wholesaler in my area?
Hello, I am also in Sacramento off Watt and 50, where are you buying this home?
Hard Money is very advantageous if you are looking to move quicker, not only with the purchase of the property, but also the rehab. You don’t need to apply and wait for disbursements to be handed out as in a traditional rehab loan and can even cashout the remaining equity to 70% ltv.
I’d be happy to help you find a HML in California. Send and email if you would like to discuss this further.
If you have enough money to do the rehab in your HELOC, why pay the points for hard money? Get an interest only conventional loan on it and use your heloc to rehab it or get a rehab loan and use your heloc for the 5% down.
It appears from the original post that the property is in “bad” shape. So a conventional loan will most likely not work as lenders require the property to be in a average habital condition.
Now a conventional “rehab” loan may work. Most will need you to put down 10% but there are a couple that will base the loan of the after repaired value, similar to a hard money lender. In any case, these loans require income/assets/and credit checks. The costs on these loans could add up to just about what a hml would be, specially if you are looking to sell quickly.
Many of my clients choose a HML after comparing them to conventional products. Much quicker and easier.