Looking For A Way To Finance This Deal

[David M.]

My wife and I have 3 properties currently and were just approached with an off market triplex and SFH. We want to buy them and fix them up to rent back out. All in we would need about 300k for purchase and rehab. We don't have the on hand cash for a down payment plus rehab and we cant house hack one of them because we just purchased another house with a VA loan. I am worried about hard money as we have never used it and I have heard a few horror stories. Wondering what options we haven't explored that some of you might have or any good experiences in this type of situation.

[Karl Forshee]

Well I’m just thinking out loud here

1. Like what was said do you have enough equity to do a HELOC or refinance with equity taken out?

2. Is the owner willing to self finance? Although you'll still need cash for the rehab. The owner self finances then use a HELOC for the repairs? Disadvantage is you have pay back the HELOC and loan.

3. Get a hard loan for the purchase and rehab. Then refinance once you have tenants. Disadvantage is you’ll have turn it quickly so you aren’t paying high fees for long. Make sure you calculate correctly so you don’t end up upside down.

4. Do you have any rich friends? Maybe network for cash investors. Use the BiggerPockets calculator to create a nice report. Ask them to finance and either you pay them back x amount or a percentage of the net rental. I would prefer to pay them off over time so they aren’t with you forever. And maybe repeat with them for the next deal.

5. Do you have enough leverage for a conventional loan?