Getting rehab money

keep searching,there are lenders that don't care about "seasoning" you may have to settle for a higher rate, but they are out there.In your post you didn't mension a mortgage broker, that would help if you didn't have one.Talk w/ some mortgage brokers and tell them what you are trying to accomplish that "you are looking for a lender that dosen't care about SEASONING.

Do the properties have equity? You should have received an appraisal report at closing from the property. The appraisal minus the down payment is your equity. If you just bought these homes the appraisal will be accurate. What is your estimate that the homes will be worth after you do the rehab? Go to a bank and apply for a "line of credit" against the properties for the $15K. Let them know what the properties will be worth after the rehab. Let them know what you monthly cashflow will be. Bring comparables with you of houses that have sold in the last 3 months to prove your point. You will get the money. Don't give up. If a bank turns you down ask them why and fix that reason before you go to the next bank. Do not allow them to run your credit before giving you an answer on whether or not the deal makes sense. Plus, if your credit was good enough to buy the homes in the first place then there should be no disputes about it now. Good luck.

First off, your equity in a property is NOT the appraisal minus your downpayment. Equity is the amount separating the mortgage amount ie. $200,000 and the appraised value ie. $250,000. In this case your equity would be 50k in that property. Secondly, Kathy said that she used her own cash to purchase these properties which left her with no more cash to fix up the properties. That is if I am understanding her correctly.

With regards to seasoning, the suggestion above from Joseph is sound. You need to make connections with and establish relationships with Mortgage brokers who have access to multiple institutions and individual investors who would fund w/o seasoning. Yes, the rate will probably be higher but well worth it in order to get what you need accomplished asap. Also, do your homework with regards to how much the true cost will be per property. I would bring in several contractors to look at the jobs and get prices and then check out the contractors themselves. Sometimes cheapest doesn't equal best possible work. You don't want shoddy work or material used that will only compel you to redo the job all over again the "right" way. That is a cost you just do not want or need to absorb. Write down the pricing of the contractor you choose, along with rental comps for the area your property is located in to the brokers. Banks are harder to deal with directly since they each have their own specific guidelines and their rep can only deal his or her banks products. Don't give up, you WILL succeed in acquiring the funding. One other course of action would be to reach out to all the people you know directly or through others that may be interested in partnering up with you for a percentage or for a flat return of funds with interest back to them. even if you have to get 5 people at 3k each, that would still work for you. Bottom line is acquiring the funds to allow you to rehab so keep your eye on the ball and do whatever is necessary to get where you want

If you buy a house for $90,000 and you put 10 percent down you would be putting down $9000. Not considering tax proration and closing costs you would owe $81,000. If the property appraised for $100,000 at closing you would have $19,000 in equity. The mortgage amount is the buy price minus down payment (not including closing costs or credits at closing). Hope I cleared this up for you.

Try prosper.com. It is a hard money leanding site. The money is lent by ordinary people like you and me. All loans are 3 yr loans.

check it out..

D

Kathy,

You could consider partnering with the contractors you hire. Have a separate agreement written (I can email you one I have on file:[email protected]) whereby the contractors cover the materials. They must also agree to wait until the house flips to get paid. Also in the agreement is the percentage amount of the profit they will be paid for their labor. I've done it before, and it's truly a WIN/WIN situation for everyone because each party has a shared interest to get the house "rehabed" sold in order to get paid at the closing table. Good luck!

I just joined the blog today. I just want to thank you all for the inspiration. I have a deal currently under contract. I was looking to do a simultaneous closing but my buyer is the city that the property is located in and they know I do not own the property as of yet I'm $35,000 away from closing a deal that could generate $50,000 profit! GOD Bless...

Anointed Living

Welcome to the DG family.
Let us know how the deal works out for you. Wish you well!

Rina

D, I know this is an old post, but I was wondering if you've had any contact with them. Good reports? Bad reports? I read some stuff online about the site, but it was kind of old. Sounds like a great idea, though. Especially for right now.

Rina

I thought\think it may be a good idea...I was/am a little sceptical so I dont have any personal experience with prosper....but it does look good. All loans are 3 years..so if you are a lender, your money is tied up for a min of 3 yrs (thats why I didnt actually try it)

Thanks. So you were looking at it as a lender...? I wonder about a borrower's perspective? Sounds promising. I'll have to do some research.
(or I could skip the middle-man and you could be my lender/partner. jk, unless...)

Rina

Suzanna:

I've been involved with Dean's material through two friends in another state whom received a postcard with Dean's information some five months ago. Just reading your contribution to Kathy has an angle re: contractors as potential investment partners in which I have not even considered.

I've approached some contractors in my local area for rehab bids on some homes I had looked at but did not know I could also approach them in this manner. Do you still have a file of the contractor's agreement on hand?

If not, where else would I be able to secure this separate agreement for ammo to approach these potential contractor/ partners?

Would I be able to use this file in CA and NV?

Could I apply an investment of " sweat equity " as collateral with these contractors as an enticement in lieu of hard money until I flip the investment with the cash on hand to return their share?

Being in debt is an obstacle of the imprisoned while debt is merely an excuse to think a little different towards a solution.

Thank you in advance, Suzanna, for your contribution in this thread. You've definitely opened my eyes:-)

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