Great question, and thanks for reading. I’ve included some links to our articles that might be helpful as well as answered below.
It ultimately depends on what your plans for the property are.
For example, if you’re looking to fix-and-flip it, there is a good loan product that would meet your needs. Hard money loans from online lenders like LendingHome offer rehab loans, which essentially are short-term loans that finance the purchase and renovation of a property. Lenders typically offer loans up to 70%+ ARV, which is the expected after repair value of a property.
With your numbers, you could borrow what you needed to purchase and renovate the property. However, hard money loans have interest-only payments are required full repayment of the principle within 1 – 3 years, depending on the loan term. So, you’d either have to sell the property or refinance to a long-term mortgage to pay off the loan (or pay it with cash, which doesn’t seem like an option).
You could also use this type of loan if you wanted to buy-and-hold the property by refinancing go a traditional mortgage once renovations are made. You could also qualify for a HomeStyle Renovation loan or an FHA 203(k) loan if you want to keep the property long-term. Both of these loans can finance the purchase and renovation of a property. However, only the HomeStyle loan can purchase an investment property.
Hope this helps!
fix and flip loans: https://fitsmallbusiness.com/fix-and-flip-loans/
Rehab loans: https://fitsmallbusiness.com/rehab-loans/
FHA 203k loans: https://fitsmallbusiness.com/fha-203k-loan-ultimate-guide/
HomeStyle loans: https://fitsmallbusiness.com/homestyle-loan-mortgage/
- This reply was modified 1 year ago by Evan Tarver.