Financing Renovation With Mortgage

[Nick Hammen]

I am looking to close on a rental house in the next month. I'm estimating some rehab costs before listing it for rent. I would like to finance the rehab work by rolling it into the cost of the mortgage instead of taking out a second loan on the property. Would that be a best practice, or would it be better to find a hard money lender, do the rehab work, and then get a mortgage based on the purchase and rehab costs?

[Will Fraser]

It's my pleasure, Nick!

In my experience local banks are always familiar with local contexts, so no matter where you are (like the tiny town I grew up in or the 2nd or 3rd tier city I live in now) you can find local banks who are able to do construction loans.  The only way to really, though, is to have the conversation and I'd say this would be a perfect networking step for you to make in growing your investments over the long haul.

Be well,