Looking for the communities thoughts,ideas and possible help.

[Jason VanOrman]

I've been a member of Bigger Pockets for 10 years now. Started listening to the podcast while being a motor coach operator for a charter company. I don't listen to the podcast anymore and mainly read the forum stuff.  I have a situation and decided to reach out to the community to see if I can get some help.

First let me give you a little background before I share my situation.

When I started investing in Real Estate in 1999, I went the creative way. My very first real estate investment was a note & mortgage creation with a sale of that note/mortgage at closing. This is how I collected my profit. I did two of those and almost lost my mind with the level of stress in put me under. The method has many moving parts. Very fragile.
But, I was sold on the value of notes & mortgages as a tool for investing in SFH. I took my knowledge and started working with local private people to fund fix & flip's through the use of notes & mortgages.

A few years later a divorce attorney came by, pierced the veil of my corporation and wiped me out. None of my private investors were impacted by this but it did take the wind out of my sail.
Listening to Bigger Pockets podcast fired me back up and I started investing again in 2016. 

I make my living as a residential remodeling contractor and fill in the work gaps with company fix & flips.

But, it seems I have found a flaw in my strategy. Private money is running scared right now. The financial state of America has ordinary people afraid. And all they want to do is hoard the money. 

My sweet spot (not so sweet nowadays) is $20K - $40K per private investor. The investment projects with purchase & rehab these days are typically $70K - $100K with a finished retail value of $130K - $150K. Single family homes in the country. (Never say rural, people run away screaming)

I use 1st & 2nds mortgages to make things happen and fund the gaps myself when needed. 

Currently, I have 4 private investors. Unfortunately, my main investor is retiring (he is 90) and one of the brother in laws in a lending partnership, wants to cash out. This leaves me with 2 active private investors. However, to cash one brother in law out, means I must cash the other out. They are connected. Although, I do have some flexibility here.

Here is my dilemma. The brother in law combination is on my current investment project. And that project is not completed to the point I can get bank refinanced. 

Working privately is more personal than using hard money or banks. And to help people be comfortable investing with me, I offer the ability to cash out anytime, with a 90 day request. I'm honoring that!

So I figured, no big deal, I'll get hard money to get it done. Wrong!

The banks/ financial companies who lend on such projects, can't seem to figure out how to fit me and the investment into their criteria box. We just won't fit!

Here is what I have...

2080 sq. ft home on 30 acres in upstate new york. The home once was a 4 bedroom 1 bath house and hasn't seen maintenance for at least 20 years. A large maple tree has caused a problem with the line from the house to the septic tank and the bathroom has been removed.
The current value of the property with house and land is between $90K-$120K. Depending on where the information comes from. Once remodeled and fully functional, according to comps, should be over $200K.

I have a family (tenant) for the property ready to go once the remodeling is complete. This family is in the HUD rental program and is currently residing in one of my wife's properties. They have grown and need a bigger space.

The plan is to get the home producing income and then begin dividing the 20 acres into building lots. I bought this property with the intention of it being my next 5 projects. 

Ive been searching for 65% of the properties current value. Lets say that is $100K. That means I've been looking for $65K. To cash out my brother in laws will take $45K. The remaining funds will help speed up the remodel.

Tenant seasoning will be required for a bank refinance. I'm figuring 12 months before a refinance would be possible. The remodel itself will only take 3 months.

Thoughts? Ideas? Questions? Private lenders?