Major Rehab

I have a contract on a property that is $19,000 with $45,000 in rehab costs. After repair value will be $95-
$100,000.
What is a creative financing technique that I could use for this property? I have @ $20,000 that I could put into this property myself. Of course I would like to use the minimum amount of my money to make this deal work. Total fix up time is 3-4 months. Any info. is greatly appreciated.

Thanks.

Comments(2)

  • Buzz16th December, 2004

    Other than a conventional construction loan, maybe a hard money lender of up to 75% ARV (after repair value) if you can get it. They may look at credit or colateral. If you turn it over you probably won't care much about the interest rate.

  • jkenney200217th December, 2004

    My company recently took on a similar type of deal, we purchased at foreclosure for $117K, put in about $60K for renovations, and we are looking for just under $300K. Initially, we were going to go through a hard money lender but they all wanted points up front or their fee was 15%-25% of the loan value. What we ended up doing was borrowing money from a friend, whom we paid 10% after 3 months and 1% per month after that. It worked out really well. We made a frind $14,000 in 3 months for borrowing $140,000. I would suggest talking to relatives or friends who can afford to loan out the kind of money that you need and you create the terms. Basically, its a short term, risk-free (providing you did your homework with the property) investment for them.

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