Rehab Over-budget - Suggestions? (Saint Paul, MN)

[Aaron Rouser]

My wife and I purchased our first SF residence - 2Bd/1BA - at the end of July in Saint Paul, MN. The goal for this property is to add additional 500sqft of living space in an unfinished basement and add an additional bathroom on the first floor. After we make our additions, we move out, rent out the property, and then get started on our first multi-family property next.  

We originally set aside $30K for this project -- we came across these funds through saving for a year and taking out a loan against our vehicle. We've burned through about $24K on bringing aspects of the home up to code, framing out the basement, materials, costly mistakes, and we haven't even started in on the bathroom yet. We are certainly over-budget and are starting to think we bit off way more than we can chew for our first investment property!

For investors who have been in a situation somewhere like this before, I have two questions for you:

1. How did you end up pulling additional financing together in order to successfully complete your project?
2. For those of you who went on to buy another property, how did you get the funds together to close another deal immediately following your rehab on a previous project? (Getting started on a MF is very important to us and we want to start building momentum as soon as we can)

Thank you so much for your time, I'm open to any and all tips and suggestions!

[Tim Swierczek]

@Aaron Rouser The answers to your questions depend on the specifics of the person's finances and situation, so this answer attempts to cover some of the areas but is defiantly not advice specific to your situation since only knowing your finances intimately could give you the correct answers, but here are some things I would either consider or recommend.

1. How did you end up pulling additional financing together in order to successfully complete your project? 
2. - A couple of options would be
   1. Get a Home Depot credit card and use a zero-interest deal to get the remaining materials and use excess cash flow to pay it off.
   2. Get a construction loan to finish the work, but this is extremely difficult to get once the project is underway.  It may not be an option in your case, you should always secure financing before starting your project if possible.
   3. Get a HELOC to get your down payment money back, this will only work if you can get 100% financing and no new appraisal is required since HELOC lenders are not going to work with you since you have a half-finished project.
   4. Get a loan from your retirement account 401K or IRA
   5. Get a gift or a loan from family
3. For those of you who went on to buy another property, how did you get the funds together to close another deal immediately following your rehab on a previous project? (Getting started on an MF is very important to us and we want to start building momentum as soon as we can) 
4. - The best way to do this is to plan it into your first purchase.  For example, it might have been better to start with an MF and lived free or cheap to save money for the rehab project, since your expenses would have been lower doing the MF first before the rehab property.
5. The second option is to do a BRRRR on the first property and then use that money for the DP on the MF.
6. The third option is to use one of the ideas above, HELOC on property #1, a gift from family, loan on a retirement fund.

Good luck to you, please PM me if you want to dig deep into your specifics and come up with some options.