Funding a full renovation

[Laurence Fru]

Good morning all, 

I’m looking for advice on finding a full renovation of a multi-family. 

The property needs gut renovating - essentially back to exterior walls, then new everything within. 

My original plan was to purchase using an FHA loan with 3.5% down as the property is technically habitable and then fund the entire renovation with cash. However, the work required is more than originally anticipated.

Working through the numbers on the property, the work still makes sense. Purchase price $1m, ARV $1.7m and requires approximately $4-500k of work.
The challenge I have is that with the work being more significant, I wouldn’t be able to fund entirely with cash  

Does anyone have any other suggestions on how this could be funded? Appreciate any ideas or feedback on this

Thanks  

[Heath Thomas Jr]

You could do an FHA 203k loan. This lumps in the renovation costs as well. There are some additional hoops to jump through like getting a HUD consultant, but it will probably be the cheapest way if you intend to live in the property for a year. You could also find a hard money loan. This would have less hoops to jump through but you will probably need to put more money into the deal and it will cost more.