Im still looking to do my first deal after reading several forums for a couple of months now, I am wanting to make aquisition then rehab and resell . My hml requires 5000 out of pocket for 70% arv or 7500 for 75%arv. Now what is holding me back is this out of pocket money. lets say if I found a fixerupper that needs 15000 in repairs, can I use a portion of the repair escrow here to limit my out of pocket.I am itching to get going ,just need some clarification on this.I am assuming they dont want to lend the money unless I have a stake in this,but still wouldnt this repair portion be suffice. thanks in advance for the guidence

You might want to change HML if you want your payment included in your loan.

HML want to only lend you what is needed not anything extra unless they say you can because it is their money.

They only want to give you 15k for repairs and most likely will want 2 -3 bid on repairs to verify this.

thanks rmb, but if I put sweat equity into this , doing say 50 % of the work myself,wouldnt this play a factor in my repair escrow, opening the door for my required down. I also need to let you know that I am a carpenter handyman capable of any repairs. My estimate alone probably is not enough, but with two other ligit contractors estimate wouldnt this allow my down pmt to come from repair escrow? thanks sincerly ps, or will you fund?

All that you are asking is up for negotiations with HML

In some cases all of this is possible. In many cases rehabbers do do the work them selves and save the money. HML just like to have bids from other sources just to validate the work and the amount.

Yes you could use the difference if you do the work.Again it just depends on the HML because alot of HML escrow the money because they do not want the risk of a borrower walking off with the money with out doing the work and thus if you do not use the money you could get a credit

ok then , I think I need to negotiate a little with my hml,thanks for the input ,off I go to subdue my ignorance with your help

You are now not ignorant you have power and knowledge to go foreward and buy realestate.

Just FWI There is a lot of HML and thus has created competition so work it ;D

Would you consider not using a HML? Could you not get a signature loan at the bank or CU for the cost of repairs and holding cost. You could buy subject to and pay the underlying lower interest payments.

Doing work yourself can delay the rehab process. HML don’t mind a bit taking the property back. They have even been know to short you on draws because they control what percentage they feel is done. HML will charge more points to extend even one month. The problem is not getting the work done it is getting it sold.