Is it possible to roll rehab cost into your loan when purchsing an investment property?
You can do that with hard money lenders.
you could also get a rehab loan from a bank i. e. fha title 1 loan
There are 3 types of loans.
Bank rehabs. Most want 15-20% down. Done as commercial financing. Fairly quick, cheap closing cost and payments are on a heloc at prime + (usally 1 or 2).
Conventional Loans available through mortgage brokers. Many lenders require 10% down. A couple will base loan off of future appraisal. Loans take 3.5-4.5 weeks as they review income/assets/credit/project. Heloc paymnet durring rehab and this modifies into end financing (arm/fixed). Normal loan costs + additioal construction fees.
Hard Money Loans. Quick and easy to qualify for. Financing based mostly on the project. More expensive for loans over $125,00 than the 2 scenarios above. Slightly higer for loans under.
Most HML’s will go to 100% of Loan to Cost with you bringing nothing to the table, but collateral. Most HML’s provide for an interest reserve that makes the payments on the rehab loan during the rehab period so that while you are unable to rent out the property for income you don’t have to make a monthly payment.