Hi iam working on trying to get a townhome to flip in Chantilly, Va
The hard money lender i spoke with said they will lend 65% of the ARV
My agent tells me this place would be about $325,000 after repairs, so with my understanding the hard money lender will give me $211,250. My agent said we should be able to pick this property up for $235,000.
So this leaves me to come up $23,750 plus another $10,000 for repairs total of $33,750. My real question will i be able to get this money from another lender as a second mortgage? Thanks i hope someone can show me the way. This is a bank owned property.
A couple of things…about $325k ARV…you NEED to nail this number down. How much have similar townhomes, in similar condition (easy to comp) SOLD for in the last 3 months? How many are on the market? At what price? And for how long?
Hard money can be a good, but expensive option. Have you contacted any other lenders such as small banks who keep the loans in-house (portfolio lenders) or private money lender (other investors etc.)?
Also a private money lender might fill the missing gap and/or you can look for a HML that will lend you more than 65%. You could also use a business line of credit for the difference.
Chris
Any resources for private money ReiForNewbies?
There are 70/75/80 ARV rehab programs for investors in VA—I don’t have enough info to determine if you would qualify though…
Regards,
Scott Miller
hello fellow savvy investors… do hard money lenders loan the entire 65% of the arv upfront, like a conventional loan?
If I were you, I would seriously research the comps to verify that you can sell this for 325k and QUICK…you really want to price it lower than market value right now to have a shot at selling it. If an agent that stands to make a commission is telling you the ARV, I would really be cautious…agents and mortgage brokers promising the moon is why we’re in this mortgage mess in the first place. Chances are 325k is a bunch of baloney. :bs
Jason,
I am afraid you are confused as to the reason we are in this mortgage mess. You may want to do a little research before you make blanket statements like the one you just posted. It makes you sound uninformed to be finger pointing like that.
The HML will do their OWN appraisal and use that #. It doesn’t matter what anyone else says. Talk to your HML about their appraisal guidelines. They may have a list of appraisers that either you or they choose from. See if you can nail it down to a specific appraiser. Then perhaps you can get a “letter of opinion” on the property to get a good idea of the ARV. I blieve a letter of opinion is cheaper because it’s not binding the appraiser to an amount. If you think the ARV will 325K but the HML appraisal comes in at 300K, it will impact your financing and therefore your purchase price. The difference will come out of your pocket.
who the hell do you think were pushing people into loans they couldn’t afford and encouraging every first time buyer to get 100% financing??? I’m licensed, and I’ve been in this business my whole life, I know what I’m talking about - definitlely not uninformed…I’m in the trenches cleaning up the mess. I have done TONS of research and I am continously sought out for advice. This mess was created by realtors pushing home buyers into homes they couldn’t afford while their mortgage broker said 100% ARM financing would be OK because the could just refi after their prepayment penalty was over. On the other hand, I will say there are some really good agents and mortgage guys out there. You probably one of them if you’re still in business…but unscrupulous agents and brokers are exactly why we are in this mess.
The agents didn’t put a gun to these people’s head and made them sign. At the end of day, it was the borrowers and lender’s responsibility to be sure they’re entering a SUSTAINABLE agreement. But neither did that. Greed and financial ignorance ultimatley caused this. The brokers and agents basically just brought the two parties together to make a deal. I’m not minimizing the duties of agents and brokers. Just laying out the basics so the blame is properly placed.
Too many people trying to keep up with the Jones’ down the street contributed to most of this mess. Yes there are people out there who have lost their jobs and are no longer able to pay for their mortgage, but the majority of this is greed like phlemboy said. I place most of the blame on the individual buyers. Just because you have a mortgage broker or Realtor telling you that you can afford it doesn’t mean you actually can. People need to be in control of their own finances. If someone signed on the dotted line for an ARM that had the potential to reset in a few years and make it impossible for them to afford their home, they should have thought about that before they did the deal. Screw the bailout. It’s not everyone else’s responsibility to fix people’s mistakes. This whole thing resembles the entitlement mantra of our culture. People have to know their financial limits or suffer the consequences.
Well looking at the way the govt. is handling this issue, it appears the only consequences are the the ones being payed by the taxpayers. I should’ve bought a home that was out of my price range. If I only knew there were no ramifications for my actions!!! :banghead
I agree…I may have been a little harsh earlier…it’s just that I have seen so many people who have been taken advantage of by a commission driven sale. On the other hand most agents and brokers are very reputable…this market should have already weeded out the bad ones.
:beer