Hard Money Rehab Loan Rehabbing Houses with No Money Down
Nowadays, a rehabber doesn’t have to spend his all of his money to renovate a house for profit. The reason for this is that he can always get a hard money rehab loan from hard money lenders. A hard money loan is a type of asset-based financing wherein a loan’s eligibility is determined by assessing the value of the property for which the loan is being made. Typically, this type of financing is offered by private investors and small lending companies instead of banks, credit unions, mortgage companies, and other conventional lenders. Hard money loans usually have a loan-to-value ratio of around 65%. Let’s say you have spotted an undervalued house and the owner agreed to sell it to you for $30,000. However, you don’t have enough cash so you ask a hard money lender for help. After conducting an appraisal on the property, it turns out that the after repair value (ARV) of the house is $100,000. The lender agreed to give you 65% of the property’s ARV as a hard money rehab loan. So now you have $65,000 cold cash in your hands. You can use $30,000 to buy the house from its owner and still have the remaining funds to cover the cost of repairs and construction materials. If you follow your budget down to the last cent, you can still have enough cash to pay for the closing cost and other expenses. See? You just completed a fix and flip project without spending a single penny from your pockets. To find hard money lenders who might be willing to provide you with the funding that you need, you should attend the local real estate investing club meetings. Many lenders of hard money take part in such events for the sole purpose of finding investors in need of financing. You can also ask referrals and recommendations from your colleagues in the business while you’re at it. If you want to get fast hard money rehab loan, you can surf the Internet and visit websites such as www.RehabHardMoney.com since most hard money lenders advertise their services online. Disclaimer: Article submitters are solely responsible for the content of their articles. ArtiLib can't be held liable for the contents of the articles. Report Abuse | Browse By Category |
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