Financing 4 years after bankruptcy

[John Taylor]

Please note, I have re posted this question here since it is a finance question.

I would appreciate any advice that someone can provide on what my best rout might be for financing a flip. The issue that I have is that a little over 4 years ago my wife and I had to declare bankruptcy and our home was foreclosed by the lender. Our financial problems stemmed from a major medical issue that I had that resulted in medical bills that we could not possibly pay in several lifetimes! Since that time we have done our best to get back on track by saving every nickel we have. Our total assets are approximately $150,000 and include a rental home valued at $75,000, two lots in a subdivision valued at $25,000 and $50,000 in cash and stocks. We are now debt free. The problem I face finding a house to flip is because of what the bankruptcy did to our credit. My wife’s credit score is now 640 and mine is even worse. In order to finance a flip without financing I would need to sell our rental house which I am reluctant to do. I have checked out hard money lenders and read as much about them as I can on this site. Although this is an option, it does make me feel a little queasy based on what I’ve read. That leads me to my questions:

• 1.)Could my wife get a home equity loan for $20,000-$30,000 on the rental and would this be a good idea? (The house is under her name.) I’m afraid the 640 credit score will prevent this and wondered and if any of you had secured real estate loans after you went bankrupt? I thought about Lendingtree.com but was afraid my inquiry for a loan might hurt an already bad credit score. I’ve been told it might.
• 2.)Is it common for two people to invest in a flip as equal partners? If so, how do you find these people and would anyone advise me to not go down this road?
• 3.)Should I just bite the bullet and use a hard money lender? Are there other options I should research?
• I would really appreciate any advice that you might have. There are several properties I have my eye on and what I am trying to accomplish is to have my funds available/preapproved so that I can move on a deal quickly. Thanks, and I am very glad I invested in a membership for this site. There’s a lot of brain power floating around these forums and I look forward to learning from all of you