Posts Tagged ‘rehab’

Real estate investing

Friday, April 29th, 2011

Real estate investing, specifically fix and flip type investing , has become very popular lately .  With the influx of REO’s and foreclosed properties , many people are able to purchase a fixer , do a little work to add some curb appeal, and sell to an end user buyer .

When dealing with these types of proceedings, many investors find themselves looking for a hard money rehab loan , only to be rather surprised by the requirements needed to line up money of this type.  In this case , a number of investors will turn to a private money lender to help them leverage their existing cash .

A private money investor is much more conciliatory than a bank may be in today’s market .  This is particularly true if your project includes any type of construction or rehab.  The banks simply are not lending money for these deals in the market today , but private money lenders are.

Private money lenders will give you the power to structure this type of funding in a fashion that will allow you to leverage your existing cash.  Typically, you can obtain hard money rehab loans using the after repair value of a property.  In addition, financing for all of the purchase price is realistic, provided you have the cash to cover the cost of repairs and interest on the loan.

In the event the real estate sector continues to experience stress, these types of investor loans are going to allow more and more investors the ability to get into the fix and flip business .  

Most of these loans are structured as short term loans, perhaps twelve months to twenty-four months at the longest .  Typically there is no pre payment penalization on these short term loans , and you can expect to pay an interest rate of anywhere between twelve and fourteen percent.  It is not cheap money, but California rehab loans are much less expensive than taking on a partner!   If you are in the market for this type of money, consider hard money lenders as a good avenue to go when looking for this kind of money .