I’m looking for a hard money lender in the that can service me in the state of Oklahoma. I typically see loan ranges much higher than what I am looking to spend right now. I’m new to real estate and I don’t have a cash reserve yet. Anyone know of a hard money lender who will give small loans typically less than 50k?
I have a good friend who is a real estate agent and she access the MLS for me. We have a lot of property in our town thats fairly cheap and wayyyyy below ARV. I need to get my hands on this property but I don’t have the funds sadly enough.
The desired loan amount is achievable in select cases, but where the rubber hits the road for you is in the lack of cash reserves.
99% of the HMLs work on a reimbursement basis—simply put, funds are escrowed, but not advanced—you need to invest your own monies to fund rehab, have it inspected/verified and then you will reimbursed.
There is an exception to the rule—an 80 ARV program that advances 10% at closing.
so there is no way to request funds for the repairs? I read that there was. I also read that as long as you got the property at a low enough percentage of the ARV that you can even pay contractors from the borrowed money.
Although funds are set aside and escrowed, you will not have access to said funds until the repairs/improvements have been completed and inspected. Simply put, you pay for rehabs out of your pocket and are paid back once the job is done—although there are programs that advance funds at the closing table, this is not the norm…
If you find contractors that are willing to work on a IOU basis (using the escrowed funds as leverage/guarantee), this would dramatically reduce the cash reserves required.
Does this clarify your question?
Regards,
Scott Miller
quote author=sdavis2702 link=topic=30309.msg141299#msg141299 date=1186269475]
so there is no way to request funds for the repairs? I read that there was. I also read that as long as you got the property at a low enough percentage of the ARV that you can even pay contractors from the borrowed money.
[/quote]
oh okay thanks. yea what i read was basically having the contractor work on an IOU basis like you said. i believe in the book i was reading… the contractor was given like a $500 up front check to go under contract with me. then they worked for a week, documented their worked which would be reviewed by the lender, then upon approval the lender would send money to pay the contractor. I can come up with upfront money to get them under contract… thats no issue. ever heard of that before?
You’ll be hard pressed to find a lender that is going to work under these conditions—they will reimburse for rehab done, not rehab in the works or on the drawing board.