Ok another mortgage lender tells me today that after an exhausing search he could not find anyone doing rehab loans to investors for that amount of rehab work…Heres what i wanted to do. Make offer on a hud home.
would bid 30,000
needs 30,000 in rehab
arv =86000 (low estimeate) just to be safe
only looking to borrow 70% of arv.
should i look to hard money then refi after fix up?
thanks for the input
Are you planning to rent this out or sell it to a retail buyer. Either way, you need to consider the costs of the hard money. Typically, you could be looking at 5 points + 12-15% interest + whatever fees they add on. These expenses will easily be several thousand dollars. Then, when you refi, there will be additional expenses. All this is going to add a LOT to your cost of the property. It looks to me like this deal is very thin with hard money.
Mike
Be aware also that most hard money lender want it due and payable within short time, a year the most. As what been mentioned already that they will financed you in prime rate. Points and other expenses to get the loan processed will all add up that you will barely make some profit.