I am a mortgage broker in Texas and I am currently building some relationships with lenders who offer Rehab loans. I really would like some feedback from investors looking for these type of loans and what they are currently finding.
What percentage are you putting into the deal? Also, do you have a hard time locating this type of financing? Any suggestions on what I can focus on for the REI?
Howdy afmdfw:
I am in Austin and Killeen. My credit score is less than 500 and I have no job except doing deals and have very little cash. I have done several deals using hard money as this is the only way I can operate unless I get partners which I am starting to do for keepers. I am paying 4 points and 14% interest on the loans and they loan 70% of the ARV. I am required to have some cash into the deal but no strings on where it comes from. In December I did a 31 unit deal where I borrowed $250,000 and put $10,000 into it that I borrowed from new friends that I met thru the club. I am about 75% complete with the rehab and have it listed for sale on Loopnet at $465,000. They only do Austin and surrounding areas and are looking at a possible San Antonio office. They are a great group and also offer a flat fee MLS listing service.
LOL Hope this gives you some input
Ted,
Thanks for the response! Congratulations on your current project. Looks like you did well for yourself. Just to update you on the lenders I am dealing with, I am agressivly seeking lenders that will allow me to structure rehab loans with no money out of the investors pocket. I have had a little success so far and I think this is something I will be able to facilitate in the near future. Usually with this type of lender they will be looking at credit scores not just the property. I will keep you informed of what I find out and let me know how your project turns out as well. Good luck!
I would like so more feedback from investors like Ted. Thanks again.
I am helping other investors daily on getting cash out of the rehabbed house that they have only owned for 3 months. I specialize in investor loans and there are several no seasoned cash out lenders that I work with.
It is true that conforming loans that you get at the banks or credit unions they want 12 month seasoning which means they want you on title for 12 months before they will give you a loan.
These no seasoning deals are risk based and thus usually mean higher interest rates so if you are going to be rate sensitive then I suggest you wait till July before you get a new loan and that is only 4.5 months away.