How Much LTV Required For Rehab?
The purchase price for the property below is 70% LTV, but the hardmoney lender doesn’t want to lend on it because it’s not 70% LTV including the close and repairs. Is that standard? If that’s the case I would have to look for deals that are more like 65% LTV to include closing or 55% LTV to include closing and repairs right? Thanks
ARV 226
Price 158 (70% LTV)
Close 10
Repairs 25
Hold 8
Total Cost 201
Profit 25
What is the standard LTV you guys look for?
While you can always go looking for financing after you bid and got a house, I would suggest you do before.
Many auction houses may require you to close within 30 days. They also may require you to provide a qualification letter stating how much can you borrow. You can get this by going to any mortgage broker who will ask for SS and some info about your finances. after credit check they can fax you this letter within couple of hours.
Financing homes that need rehab is little difficult then the houses in good shape. But if you
buy foreclosed houses at a good price that is less them the appraisal( based on current condition) you will not have proble with 15% down.
Then you can put other money for rehab. and refinance or sell after rehab.
Try a short term commercial loan. Smaller lenders might loan up to tax appraised value with good credit from the borrower. If you can aquire the property under tax assessed value then you may be able to use the difference towards the rehab costs. Worth a try.
The key point is estimated value of the repaired property. What you can do is go to a real estate appraiser, It might cost you 150 to 400 to get the place appraised based on the current conditions. Take that piece of paper to the lender and then talk to them.
One draw back you seem to have is a lack of track record. For the amount of $300,000, few lender will be willing to take chance on a new comer like you. I suggest you start with something smaller close to median price of home in your area.
Good luck
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Hey Guys,
I came across this article that I find would be of interest, it goes over what is available......pros and cons.
http://www.solareco.com/articles/article.cfm/id/95
NC_Yank
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