Financing a Property That Has an ARV under $100,000

[NIc Green]

Hello Investors! Found a property for $25K. That includes a 1,900 sqft house that sits on a 1 acre lot. The repairs will cost about $35K. The ARV/Fair Market Value is $85-$90K. I know most hard money lenders want to lend for more than $100K, not less. What/who do you recommend for financing this type of deal?

[Darrell Shepherd]

Believe it or not, its easier to fund the big ones than the little ones.  Lima One doesn't have a minimum loan amount, but their minimum origination is $3500 and you'll have another grand or so in fees.  Hard to give them that much and still make money on a $25k spread.  You're working on a 30% margin and have about 15% in hard costs so when you pay extra points on money costs you dont have much room for error on those smaller ones.

Might could find a private lender, you'd be surprised how many people have that kind of money laying around in cash equivalent assets.

Bank isn't really an option unless you are using other collateral like a HELOC on your home's equity or something.

I haven't tried ground floor or any of the other crowd funding platforms, but there's an ad for it on my screen as I'm typing this and my understanding is they've come a long way since I talked to them at launch.