Question about 100% HMLs

Is it possible to find a HML that would lend the total purchase price plus the rehab at closing? All that I have read about do draws. I’m thinking that could get messy if I don’t have the cash reserves to pay the workers until the draw comes in. I’m new so if I’m overthinking something, just let me know. Thanks in advance.

Howdy JRV2:

Never heard of HML loaning the rehab money without draws. I did get 5 draws on a $35,000 job. The first draw was hard as you say I had to pay up front and wait until the draw. Some contracters did not mind waiting a week or so and some wanted moey upfront for materials to start. I did a lot of the work myself and charged some of the materials on a credit card. It is hard but I managed to get it done.

Thanks for your reply. That’s what I was thinking, but it was worth a try, maybe I’d luck up and someone would know one. :slight_smile: If the at least the first draw was given at closing it would show the contractor that you had the ability to pay. I guess I can search around to find someone who would accept payment after completion.

Jessie R. Van, Jr.

Another option is to work with a vendor that will accept payment upon completion directly from the HML. The rehabber saves cash and the vendor knows they are getting paid directly.


Thanks for the advice. Maybe you could dispell this rumor for me. I’ve heard that it is best to try to get your own appraisal because HMLs will use appraisers that shoot low to minimize exposure. Is this true?

If so, would the contractors be the same? HMLs are in the rehab business, so I’m sure they know some good, reputable contractors. That’s one less thing I have to worry about. But I don’t want someone who overcharges me, and I get less than what my rehab funds should allow.

Thanks for your help, once again.

Jessie R. Van, Jr.

Howdy Jesse:

The HML I just did a deal with ordered the appraisal and it came back for more than I thought. The HML insisted that I spend the money and repair the house to top notch condition instead of my plan to patch and skimp. I was planning on selling for the mid 90’s but was told the value would be closer to $120,000.

The first HML on this same project turned down the deal with their low appraisal. I am not sure if the HML ordered a low appraisal or what but it was amazing how different comps can change the value.

As you can imagine I had already lost the first appraisal money and was sure hesitate to spend good money after bad. The house is almost complete and I will be listing it for sale next week. Lets hope the HMl and appraiser are right and I can make $30,000 on the deal

HML’s typically require an appraisal from one of their “approved” to ensure an accurate analysis of current market value and ARV.


Thanks Ted and Rob.