Rehab Loans

I am buying rehab properties in LA and doing the fixing work with my own crew.

The properties are intended to be rentals and I will keep them. I am not a flipper.

I am looking for rehab loans based on ARV that will continue as regular financing. I can put down a good amount and I have an excellent credit score.

My questions:

  1. What is available out there for rehab loans? What rates? Fees?
  2. Can they work when I do the work myself without a general contractor?
  3. How much would they cost me compared to doing the whole deal and repairs with my own cash and then cash-out after the repair?
  4. If these are fixers, am I going to run into seasoning issues if I try to refi after the rehab is complete?

If there are mortgage experts who can help, I will be happy to do business with them.


This fits in well with your other question about the # of properties that can be financed as some of the same lenders wll be used.

You have a lot of great questions here that will require some lengthy explenations. You may be better served by having a full conversation in which you can also answer some important qualifying questions.

A couple quick short answers.

There are several types of rehab loans ranging from your local bank, conventional lender, and hard money. You may want to look over the last couple posts about these.

Generally, seasoning issues will not be a problem.

However, most conventional lenders won’t do a rehab loan on an investment property, so you will probably have to look at the other two options mentioned- hard money or local banks.

If you have working capital, I would avoid hard money if you can. It is expensive. You will probably run into a max # of properties using your local bank, but you will not know until you ask. Another big question when it comes to rehab loan other than it being investment property is are you going stated or full doc? Lots of conventional lenders that do rehab loans, won’t do stated ones although I do know of a few that do.

I’ve done this 2 ways:

I have a lender that will loan the purchase price plus estimated repairs (held in escrow) if I put 10% down. rate is a little higher, though. And they only give you 60 days to rehab.

or, finance the home, pay for the repairs and then refinance. it costs an extra closing, but may be worth it to keep your 10% and get a little lower rate.

seasoning should not be an issue with a refi.