I have learned that it is possible to included 3 months worth of interest-only payments in a hard-money loan. I have also learned that most lenders reinburse work already completed, based on inspections and reciepts. According to my course, I am supposed to increase my construction costs by the amount of interest-only payments.
So, how do I get the monthly payments when I need them if the lender needs a reciept for work done??
I have learned soooo much from this website, and will be another successful Real Estate Investor. Thanks for any feedback.
I have also learned that most lenders reinburse work already completed, based on inspections and reciepts. According to my course, I am supposed to increase my construction costs by the amount of interest-only payments.
This is not accurate. YEs! HMLs DO reimburse the borrower on work performed once inpsected but that amount is Verified BEFORE and AFTER by most HMLs. What you are trying to do is get your HML to lend you more on repairs so you can make the payments…not very hoest and this will come back to haunt you if your lender finds out.
Further by inflating your rehab costs (enough to cover your payments) you are reducing the amount the lender will loan toward purchase…so unless you have a relly good deal you may have to bring more money at closing
So, how do I get the monthly payments when I need them if the lender needs a reciept for work done??
I have learned soooo much from this website, and will be another successful Real Estate Investor. Thanks for any feedback.
You don’t. If you can’t afford the monthly payment…you may not be ready to be a rehabber yet. You might try Assigning contracts 1st until you build up enough capital.