Posted by Rod on February 20, 1999 at 17:56:59:
Thanks for the info!!! This site is truly SUPERB!!!
HARD MONEY FOR REHABS QUESTION - Posted by Rod
Posted by Rod on February 20, 1999 at 06:57:07:
I have found a house that I think would be a good one to rehab and retail it. If I get hard money based on 65% of the LTV, the house is 33K and will retail at 75-80K, will I be loaned enough money (65%) up front to pay all closing cost and points. OR does the lender send the exact amount initially to the escrow company leaving me to have to come out of pocket?
Thanks for any advice!!
Re: HARD MONEY FOR REHABS QUESTION - Posted by Bob-Tx
Posted by Bob-Tx on February 20, 1999 at 17:12:09:
The lenders I use will gladly loan rehab money if the deal is good enough. They probably will do an appraisal and loan based upon that. If you rehab dollar amount is very high in relation to the purchase price they may give some resistance, this being your first time with them, but your argument is the LTV and their security in that. The folks I use are happy to roll closing costs and appraisal fees into the loan amount. Also plan on them paying your rehab funds out in increments as you complete the work.
Best of Luck,
Bob
Re: HARD MONEY FOR REHABS QUESTION - Posted by SCook85
Posted by SCook85 on February 20, 1999 at 09:00:24:
Rod,
This is all up to the lender. They all have different guidelines and rules, there is not an industry standard. I have all kinds of people who will lend me hard money. They range anywhere from 90% of purchase price to 100% of purchase + rehab + closing costs if the deal is good enough. I have found that most lenders at best will go 100% purchase price on your first deal with them. They like for you to establish a track record with them before lending rehab money, but this is not always the case.
Most of the lenders I know will lend me rehab money but they put it into escrow until the work is completed and inspected. When complete the authorize the release of the funds.
Hope this helps.
SCook85