Question for rehabbers or wholesalers.... - Posted by Charity

Posted by pboone on May 08, 2000 at 12:38:55:

What if a nuclear bomb was launched? You worry to much about things that do not matter.
Have a plan and work it, in other words 1-find a hard money lender or 2 is better still 2 - write an offer subject to something or other then go with all of your might to make the deal happen.
If you are really finding deals at 65% of FMV after repairs are complete then you will have NO problems with funding or flipping.

Question for rehabbers or wholesalers… - Posted by Charity

Posted by Charity on May 08, 2000 at 11:29:26:

I am so ready to buy my first property and either rehab or wholesale, but there is one thing that scares me…

What if I buy the house and cannot get the financing? Say I find a deal on a home that has an ARV of 100K and I buy it for 50K. Repairs are 15K. What if the hard money lender won’t lend me enough to do repairs and the purchase? Does that mean I am paying too much?

I find all kinds of deals being in real estate, but I am afraid I will get in over my head and then not find a lender willing to take a chance on me or not willing to give enough for the property. Anyone had that problem?

I think if I can get over this hurdle, I can proceed.


Re: Question for rehabbers or wholesalers… - Posted by Steve-Atl

Posted by Steve-Atl on May 09, 2000 at 08:23:49:

Hi Charity:

Fear of the unknown can be a powerful deterrent to getting started, but there are several ways to address your specific concerns. Escape clauses in the contract are the most obvious, but if you can buy it cheap enough, the money WILL be there.

You need to understand a financial proforma of how this type of deal works. If the hard money lender won’t lend enough to do purchase + repairs, it does not necessarily mean you paid too much. It only means you will need some cash to do the deal. The key is comparing the cash investment needed to potential profit.

Give me a call if you want to discuss further or look at a sample proforma.

Re: Question for rehabbers or wholesalers… - Posted by Ben (FL)

Posted by Ben (FL) on May 08, 2000 at 15:42:50:

When you find a 50% fo ARV deal like that, try calling the commercial lending department of several banks. Tell them you are an investor and would like a mortgage on investment property. Since they are in the business/investment frame of mind, they do not react at all to a fixer-upper like the home mortgage department will. They will also be much more flexible, and require less documentation. Of course, instead of prime, you may get 1.5% above prime with a point or two, but it’s better than hard money!

Use an escape clause in your purchase offer (nt) - Posted by Paul_NY

Posted by Paul_NY on May 08, 2000 at 12:46:39: