Half way done with multi unit remodel, ran out of funds!

[Paul David]

Due to unforeseen circumstances I ended up spending more than I anticipated (like everyone warns). What is the best way to raise 40k to finish the job? Because I'm in the middle of construction I can't pull out an equity line. It's owner occupied 4 unit building. Most hard money lenders only do a NOO. Any ideas? Once complete I'll do a cash out refi n pay back investors as I should have 300k + in equity after remod.

[Michael Ealy]

Originally posted by @Paul David:

Due to unforeseen circumstances I ended up spending more than I anticipated (like everyone warns). What is the best way to raise 40k to finish the job? Because I'm in the middle of construction I can't pull out an equity line. It's owner occupied 4 unit building. Most hard money lenders only do a NOO. Any ideas? Once complete I'll do a cash out refi n pay back investors as I should have 300k + in equity after remod.

 Yeah - hard money won't work for you since this is owner occupied (I am assuming you live in the property).

Here are 5 ideas that MIGHT work:

1. unsecured Business Line of Credit - do you have an LLC? If not, put one up. You need to have a minimum 720 credit score. What's nice about BLOC (when done correctly) is that your balance will not be reflected on your personal credit. I can refer you to a resource who can help you with this.

2. unsecured Personal Line of Credit - do you have a good relationship with your local bank? Ask for an unsecured personal line of credit. If you make good income and have great credit, you should be able to open an unsecured $40K line of credit

3. Peer to peer lending - you can borrow $40K cash from P2P lending websites like LendingClub.com. As long as your credit is good (I think around 650), you can borrow money from P2P sites.

4. secured Personal line of credit - if your credit is NOT so good, and you have some assets like Certificates of Deposit or stocks, talk to your banker about opening a SECURED personal line of credit. For CDs, they will lend you 100% of the value and for stocks, they will lend you 30-50% of the value. So, if you have $120K worth of stocks, you don;t have to sell them and pay the capital gains taxes. You can just pledge it as collateral to borrow $40K cash.

5. Lastly, you can always try friends and family - if all else fails. If you're a trustworthy person, have decent income (or have a decent job), you should be able to borrow money from your personal network.

Hope the above helps!