Hard money lenders
Hello, All
I live in the Western Suburbs of Chicago. In my town and the five or so towns that surround mine, you'll rarely see "rehab" projects. What you will see, are builders and investors buying perfectly decent, livable homes, priced from $200,000 - $600,000, tearing them down and erecting homes that will retail between $400,000 - $1,200,000.
It's my understanding that hard money lenders will loan approximately 65-70% LTV. My question is (yes I know, finally <g>
... Will hard money lenders loan monies for a teardown/re-build as opposed to a straight rehab?
Thanks for your patience and for you replies,
RJ
ttt I want to know 2
good question, Ill look into that one.
Hey RJ,
My banker could care less if I spend the money on new construction or rehab as long as I can show on paper the risk is minimal to them...hence the 75% LTV
ratio they are willing to fork out.
I provide them with a specification sheet
(which is consist of 1 page), cost estimate (also 1 page not detailed) and a set of prints for the project. They hand it off to the appraiser and I usually go to closing in about 2 weeks.
Im sure if lending institutions have been burned from past experiences than you may have harder time......but with interest rates as low as they are......they are pretty much fighting to get your business as long as they can justify the numbers.
I currently have 2 banks that call me every 2 months wanting to lend me money for projects.......5 years ago I couldnt get a loan from them.........and one had 20k of my money sitting in their vault and I had a credit score of 740.........jerks............now I love it when they call......just so I can kiss em off.
good luck
Hello, NC
Thank you for your reply. Your words are very encouraging. I'd just about given up on a response to this query. Sounds like I should start putting together a few cost, print, and spec. sheets. Thanks again for your help.
RJ