Has anyone worked with a hard money lender that their LTV is more than 80% of the repaired value of the property. If so can you shoot me a message of who that hard money lender is and if they loan in Texas.
Most if not ALL TX HMLs cap their LTARVS @ 70%. We do this to make sure we do not lose money. You should not look at a deal above 70% of ARV for the same reason.
If I were to get a house worth 70% below ARV do you or know of any other hard money lenders open a seperate account for fixup costs i.e. (70% LTV of 100k is 70k but out of that 70k I would want to have a seperate escrow account open of 20K for repairs so in reality the price that the seller is getting is 50K.)
Most rehab loans are done in that fashion. A loan is given to acquire the property, then the rehab funds are placed in escrow. You will have to do draw inspections to get the funds released, similar to a construction loan.
And to 80%. Don’t forget you have to figure in closing costs, holding costs, ‘oopsies’ - ya know where you pull down a wall and find a can of worms, and closing costs on the sale side as well.
When you add all of these costs in, 20% won’t allow you the wiggle room you need.
That is why lenders won’t go that high.
Thanks for your replies. It was helpful.