HELP! Bank won't loan unless move-in ready

[Virginia H.]

I have come across what may be a fantastic opportunity for a flip ( **I HAVE NOT YET LOOKED AT THE HOME SO I AM NOT CERTAIN ** ) ... purchase price and rehab costs come in around 66% of resale value and the average time on the market in the area is approximately 60 days.

This house is not yet on the market.

Asking $50,000

Rehab - about $30,000

Sell - $120,000

I contacted a lender and was told the house must be move-in ready AND I must have enough funds in my personal accounts (be it savings, 401, or whatever) to cover all expenses (mortgages (my home and this one), car, loans, etc) for at least 6 months.  

Translation - based on this information I not only can not obtain a loan through this lender because they will not loan because it is not "move-in" ready but I can not even use my small reserves as the downpayment required.

I'm now officially stuck... Can someone please advise as I had not anticipated these situations.

[Ben McMahon]

I have had a lot of experience with a lot of different lenders.  You need to identify a lender that does what you are looking to do.  There are some, but not a lot.  If you look decent on paper, and have the ability to show your past deals than it could work.   I have gotten a portfolio loan from a local bank when I only owned two properties.  I have also gotten loans based on a simple profit and loss statements.  Its going to be a commercial loan, and your interest rate will be slightly higher, but who cares if you are just going to flip it.  Also, its a changing landscape, so keep asking.  Remember who was getting loans in 2006?  Everyone!  Than in 2010?  Nobody.

Best option in my opinion however is to find a private investor to partner with( maybe on BP) and buy it with their cash and rehab with their cash.  You can almost always get the purchase price at a 10% discount (or more) providing instant equity above your rehabbing.  

Your private money is going to vary.  When I started I just went with people that I somewhat knew.  I had to prove myself and I did.  I also cared a lot more about them making money than myself.  That has paid me back many times over.  Sounds like you kinda know what you are doing, so I am probably preaching to the choir.  

PM me if you want more info on want has helped me.  I am not a new investor anymore, but Im not so far that I forget what it really takes to gain momentum.  My first flip was almost the same dollar amounts.  I ended up asking 10 people for 10k, and 3 said yes.  They gave me 30k so I went back to the yes pool and asked for 20k  worked on all of them.  We did a successful flip and I still do business with all 3.  They love me because I have made them a lot of money, and they know that Im concerned about that even more than I am about myself.  So that was only 2 years ago, and one of those guys has over 1.6 million  currently tied up with me.  Had no idea that he had that type of green.  He has also cut my rates because he feels like he's making more than me.  Bottom line, banks are for long term financing, i would flip with cash