how to get money for a remodel

Hopefully I have the right forum-

I’m looking to buy a SFH this summer/fall in Maryland in Montgomery County. It would be great to find a “fixer upper” but in this county they are hard to come by - everything is expensive because land is at a premium.

A new home would be great, but more practical is buying an existing home and doing rennovations - from cosmetic and major depending on the property.

My question is how can I do this most effectively for my wallet? I have a townhouse but plan to hold on to it and rent it out - so I would be going into this purchase with little to no equity. Can I refi a house I have no equity in?

I have read here and other places about getting a mortgage for more than the actual purchase price and using the difference for improvements - how do I go about approaching a lender on that (is it legal, I dont want to scare anyone off). Can I do something like this on an interest-only loan or just a traditional fixed?

My husband will be in a very strong position financially within a year due to his business growing exponentially - just don’t want to wait to get into the county and get a foothold in a good school district, etc. We can refinance into a fixed at that time. My feeling is that if you wait to buy real estate there is always a reason not to buy.

Any advice is appreciated.

I just sent a message to you regarding Montgomery County (check your messages). I would also be interested to learn the criteria lenders use in order to approve funds beyond the list price in order to use for rehab work.

I’m not much help on your questiona nd also anxiously await an answer. However, though I live in Tucson, I am very interested in the MD DC to Baltimore corridor. If you have info about doing real estate investing in these parts, please post here or send to me.



I’m new to this as well, but this is what I’ve come away with by talking to a few mortgage brokers:

Assume you find a home for $225,000 that needs $20k in repairs and you know it will appraise for $350,000 after repairs. What you could do is negotiate the sale for $255,000 with the seller paying your closing costs (assuming $10k) and pull out $20k in cash at closing to be used for repairs.

Keep in mind, you will need good credit to be able to do this. You should be able to do it with an interst only loan.

Are all these properties for owner occupied properties? If so there are plenty of loans like a purchase plus that will allow you to finance upgrades to the home. NOO properties are a bit stickier, but can still be done by many national lenders.

I buy all my properties with no of my money out of pocket. I borrow the money to buy the property pay all costs and do the rehab. The key is the property has to be cheap enough so that all those costs are 90% of the value of the property or less. I would go to my local real estate investor’s club. You will find there are people that advertise in their programs on their websites speak at their meetings etc. These guys are property managers, contractors and even mortgage brokers. These people are used to dealing with investors and what products these investors use. Talk to them. Don’t talk to your friends brother is a mortgage broker. He will have no idea that this product even exists. The guys you find at the local real estate investors club meeting will be able to put you into a loan that will get you want you want.