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Updated almost 8 years ago on . Most recent reply

User Stats

63
Posts
8
Votes
Lee Schram
  • Real Estate Investor
  • Northbrook, IL
8
Votes |
63
Posts

Hard money lender criteria

Lee Schram
  • Real Estate Investor
  • Northbrook, IL
Posted

Hi bp community, 

Im running into some difficulty finding financing for some potential deals because the purchase price is lower than the rehab amount. Several hard money lenders have told me that they won't lend because of this. 

Any suggestions? Or know a lender where this is not an issue? 

Thanks 

Most Popular Reply

User Stats

94
Posts
18
Votes
Paul Khazansky
  • Investor
  • Washington D.C.
18
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94
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Paul Khazansky
  • Investor
  • Washington D.C.
Replied

Typically this should not be an issue as long as you are bringing enough equity (i.e. cash) to the deal at closing. Buying a property for say, $70,000, and putting another $100,000 of rehab capital into should not be a problem as long as (a) your comps support a high-enough ARV, and (b) you are bringing enough equity to the deal.

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