Money Needed For Rehab
Here's my situation I bought in April 2003 a rehab house (3br/1bath) for $108,000 put down $11,000 my current balance is $96,400. I don't have the money ($20k - $25k) for rehab and can't continue to pay the mortgage at $946.80mo at 6.5%. Rental property in the area is between $1000 and $1200 a month. I didn't know the rehab will be so much but the cards have been dealt. Any suggestions on where I can get the rehab money or what should I do with the property?
Try looking for a grant. Can you refi to get a lower pymnt?
how much equity is in the property? A cash out refi might be the solution.
Mike
Mortgage Broker
You can of course always bring in an investor. You bargain with him as to a percentage of profit or a fixed sum above investment according to what is best for you and which way the investor will work.
If you have a value over what you paid for the property you can always go to your local Mortgage Broker and see if he can get for you a second mortgage which will supply the Rehab money.
Of course you can also attempt a refinance for the higher amount and trade for this cash an increase in interest rate. Watch for a prepayment penalty you do not want that as your future purchaser will of course be obtaining a new mortgage at a lessor interest..
Go for it. Lucius
What will the house be worth after rehab? Is there going to be enough profit to make a rehab profitable? What is your basis for spending $20-25,000.00 on a rehab? I have been in the rehab business for over 25 yrs. and have never had to spend more than $12,000.00 on a rehab,and this house was condemned.
Nice to meet you MichaelChandler,
About a year ago, I finish remodeling large 4-plex. It was 80 years old and I felt it would worth my time and money to gut it out and bring it to a new-alike condition. I spent almost $80K ( almost half on materials) so I wonder how you can do for a 12k a pop. My assumption is that you do only kitchens and baths and some cosmetics. Nothing structural bellow skin. Let us know some of your secrets. Our newbies will appreciate your help.
rejo60,
What you need to do is refinance using a "negam" (negative amortization) loan. COSI, COFI, etc will allow you a decent reduction in monthly payments and time cushion for increase in rents while the reduced monthly payment will leave you some breathing room for a second mortgage. Use it to to remodel the house and enjoy your landlord pride. [ Edited by omega1 on Date 02/02/2004 ]