Delayed Financing in Houston, TX

[Minh Le]

Hello BP community,

I am ready to make a cash offer on a major rehab property and plan to utilize the delayed financing exemption to get my capital back out (sales price, closing costs, and rehab). I am hearing conflicting things from the forums regarding this as there are lenders that have commented that you can only cash out the purchase price plus closing costs (no rehab) or 70% of the appraised value, whichever is LOWER. However, those who have done it has said that they were able to cash out at 70% of appraised value on rehab projects. I am leaning towards those who have done it, since it sounds more plausible. I'd like to hear more from those who have used the exemption strategy.

I approached several of the big banks in town to ask about the delayed financing exemption and they all look at me as if I am speaking a foreign language. They all try to push me back to a HELOC on my primary residence to fund the project. I have seen comments suggesting to reach out to small local lenders who specialize in working with investors for this, but I do not know who they would be. Can fellow BPers refer me to some Houston area lenders that I can contact?

One more thing...my partner and I have an LLC and the funds to take on the project, but do not have the W2 income to support the financing option. I do have someone in mind to help with this. Does this person needed to be added to the LLC as well, if we are to purchase the property under the LLC and delay finance afterwards?

Thank you in advance for your inputs!