Purchasing a condo with hard money

[Jim Owens]

I am purchasing a small condo for 35k and it is worth about 70-75k. I am using hard money to purchase this condo and the hard money loan is good for one year. I would like to know if there is a way to refi the property with traditional financing within that year period to lower monthly cost. Also is there any way to pull out cash through a refi up to 70% to purchase a second property? I have been told that this is possible but having trouble finding a lender. I am in las vegas,nv. Thanks for any help.

[Jon Holdman]

In a case like this, "no rehab" is a bad thing. If you're paying $35K and not touching a thing, you'll have a hard time convincing a bank the value is anything besides $35K.

12% on $35K would be $350 a month. To be clearing $500 in true cash flow (vs. "phony cash flow" of "rent - payment, taxes, and insurance) your rent needs to be $1700 a month. If that's really the case, you've found a pretty amazing deal.