Need financing to rehab

[Tanya Potts]

My family have a property that needs rehab badly. Want to rehab and rent it out since the family has pretty much abandoned it as we all got older. How can I get financing to do it?

[Jeff Schemmel]

@Tanya Potts I recommend a couple things to start...

1.) you need to understand if money is owed on the property and if so, how much?
2.) you need to understand what the property is currently worth on the open market, and how much it may be worth if you did the rehab.
3.) once you have an estimate of these numbers, connect with lenders who can offer a HELOC (home equity line of credit).
4.) this part gets tricky because it has to make sense at this point... but... if the amount you can get on a HELOC allows you to do enough repairs/renovation to warrant a high-enough ARV (after-repair value) it may make sense to take the HELOC to pay for the repairs and then get the property appraised after. Based on that new appraised value, you may be able to cash out refinance with a lender and pay off the HELOC. It makes a lot of sense to draft a plan and run it by experienced investors and lenders before commiting to this. You really want a lender to agree to your plan and refinancing when you get it fixed up before committing.

All of this is super speculative, and it may not be a realistic option for you, but this is a potential path to look into.