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Updated over 5 years ago on . Most recent reply
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Getting Financing on Multi-Fam that needs repairs
Hey all! I am new to investing in rental properties and have a goal of acquiring my first Multi-Fam in 2020. There is a TriPlex I am interested in pursuing after running the numbers. I want to finance my first deal and the seller is good with accepting offers from buyers that will be financing. After taking a look at it, the roof is going to need repair for it to pass appraisal. Does anyone have any ideas on how to get financing on properties that need repairs to get a loan? FHA 203K is not an option as I will not be living in this. Thanks in advance!
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Talk to some local banks and see if they'd be willing to help. I've done multiple projects with a local bank that did 80% loan-to-purchase on distressed property. I typically would raise the rest of the money for the rehab through personal connections or use my own money. In one instance, I took out an unsecured personal loan to cover the difference.
If that doesn't work, you could go hard money and use a lender like Lima One - there are others out there. They have programs where you can roll in the renovation. I have worked with clients that were able to get 90% loan-to-cost. The properties purchased and financed using Lima One were heavily distressed.
If you don't want to pay higher interest rates and points, you could go the private money route and try to work with your network to raise the money to get it done.
If that doesn't work, you could go hard money and use a lender like Lima One - there are others out there. They have programs where you can roll in the renovation. I have worked with clients that were able to get 90% loan-to-cost. The properties purchased and financed using Lima One were heavily distressed.
If you don't want to pay higher interest rates and points, you could go the private money route and try to work with your network to raise the money to get it done.