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Rehab Loan??
Okay, I found what appears to be a wonderful opportunity today. A house for only 35k in a neighborhood with 115k homes all around it. Definately a diamond in the rough. Went in the house with a realtor and looks to me like it can be rehabbed for less than 20k. Called up my banker and because the home is without a kitchen - it is totally gutted - she can't help. She is checking to see who can fund me, but I really want this and can't stop thinking about it!!!!
Anyone know who could lend in this situation. The house is in poor condition and the asking price is only 35k, which most lenders have a 50k min...
FICO was in the low 700's past summer...haven't checked since. This is in Kansas, by the way, and the average sales price here is only 135k (if memory serves), so it may seem like chump change to someone where homes go for hundreds of thousands, but the housing market is NOT like that here.
Tried to finance with Bank of America. Actually she said if the house had cabinets and a sink in the kitchen I would be good to go...any thoughts?
5 Answers
- 1 decade agoFavorite Answer
A construction loan or local bank, as mentioned by the two responders above, are your best bets. However, if they don't work out for you, you might want to try alternate financing, like Prosper.com, which is peer-to-peer lending, sort of like ebay for loans. (Note: I am not a member, but I'm thinking hard about joining.)
The interest rate you pay to Prosper will likely be much higher than you'd pay to a bank. BUT, once you buy the house and get some sort of kitchen in place, you should then be able to turn around and get refinanced by a bank or S&L.
HOWEVER! Before you go this route, check what the rules are on prosper.com for early loan payoff, how long the loan will be for, and what the payments you'd make are. I don't think they do long-term loans, so your payments would be much higher - you might have to get a larger loan to cover the payments you'd be making. You'd want to hold the prosper.com loan as short a time as possible. Also, join a group if you can - it cuts your interest rates.
Hope this helps!
- 1 decade ago
Local banks are ideally suited for this kind of activity. They will charge you a premium for the loan (prime plus a 1/2 or more on the rate plus an up front fee). It is short term financing, but good enough for you to finish your project then place it into long term financing or flip it.
Best of luck.
Source(s): Realtor, Mortgage Broker, Investor doing exactly this for years, http://www.buyhawkeye.com/ - Anonymous1 decade ago
This may be bait for a construction loan. Check with local banks and S&L's. Usually, a construction loan is used to erect a house on bare dirt, but it could be that doing a major rehab could qualify. Once the work is done, the construction loan gets replaced with permanent financing.
- Anonymous1 decade ago
I know of hard money lenders and investors who specialize in deals like this, also setting you up for no payments for 6 months while you flip it. Fill out the free situation evaluation form at
www.totaldebtsolutionsllc.com
and i will have 1 of them call you tomorrow. Good luck!
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- Anonymous4 years ago
thrilling predicament and ultimate gave an enticing answer. yet i think of he ought to do a sprint rehab on his own loan as a thank you to consolidate it. it somewhat is now problematic, yet through skill of the years the two one in each and every of you may artwork it out.
