My first deal, give me your opinion on my plan

I’d like to know if my strategy is a good way to go about my first deal.
I found an off market deal and the numbers look good, I’m submitting an offer.

$350,000 to purchase $100k rehab AVR $625,000

My question is mainly about how I’m going to finance and if this is the best way to go.

The plan is to do a cash out refi on my primary increasing my loan to $450k from around $340k puts me at a 70 LTV

Put down around $70k on the new property and get hard money for acquisition and rehab. At the completion of the rehab I will refi into a better loan and hold or sell what ever looks best to me at the time.

I’ll have to admit I pretty anxious just thinking about spending money like this but barring any catastrophes the numbers work.

I’d like to know if I’m taking the best steps on the financing, a few more notes I’m self employed and I’m doing a bank statement refi the rate is higher than I’m paying now at 6.5 I’m at 5.25 now

You probably want to find a better hard money lender who’ll loan you 100% of the purchase and rehab costs …perhaps using the equity in your primary resident as additional collateral for the loan …as a last resort …and NOT refinance your primary residence.

Hard money fees can already be enormous, without also paying a bunch of money to refinance your primary residence.

It’s usually better (and faster) to collateralize new borrowing, than it is to refinance …depending on what interest you’re paying.

Thank you for the response! Do you know of any lenders that will do that?

Hard money lending is mostly local. A local lender will be familiar with the area, and able to make a more informed decision on lending.

An HML can be a backstop against buying wrong.

I would google ‘hard money lenders [insert your city]’ and see what comes up.

Also, you might want to consult with a loan broker. They often arrange hard money loans, if they have a lender familiar with your area, etc.

Every hard money lender has different criteria for lending.

*** BTW, the more times you borrow and perform as agreed, the cheaper (usually) their money gets, and the more generous they become on their appraisals of your deals. It’s partly about the deal, and partly about your performance history, that a lender bases their decisions.

Here is a listing of Hard Money Lenders on this site. I do not know how accurate it is nor would I recommend any in particular. However, it may give you somewhere to start.