What’s wrong with my deal? (Hard money lending rejection)

[Keith Richardson]

Good day, BP,

I’m trying to understand why hard money lenders keep turning me down on my rehab project. 

The deal:

Paid 60k cash for house needing total rehab

Anticipating needing a loan of 150-175k with an ARV of about 325k

The only thing I can think of is that I don’t have any experience with a project of this size. 

With interest rates on these loans being 11-12% and my request amount you would think it’s a score on their end. 

What do you think?

Gratefully,

Keith

[Robin Simon]

Quote from @Keith Richardson:

Good day, BP,

I’m trying to understand why hard money lenders keep turning me down on my rehab project. 

The deal:

Paid 60k cash for house needing total rehab

Anticipating needing a loan of 150-175k with an ARV of about 325k

The only thing I can think of is that I don’t have any experience with a project of this size. 

With interest rates on these loans being 11-12% and my request amount you would think it’s a score on their end. 

What do you think?

Gratefully,

Keith

 I think its also a harder qualification to get a Hard Money loan for rehab only after you've bought all-cash - changes the deal economics and structure and risk profile on the lender side.  Ironically, might have had an easier time if you were requesting a larger hard money loan for both the purchase and rehab