Has Anyone Used a HELOC for Property Rehab? Seeking Creative Financing Ideas

[Emmanuel Ola]

I recently purchased a burnt building and I'm eager to rehab it. The city has already approved the permits, and the cost to rebuild the 1200 sqft. house is estimated at around $120K. However, I'm short on cash (will be putting $20k of my personal money into this)  and I am exploring creative ways to source funds for the project.

I've been quoted for a $100K HELOC on my primary residence with a 30/1m ARM at a 13.25% rate and APR, with an interest-only monthly payment of $1,016 and $3,825 in points. This quote is from Better Mortgage, but I'm wondering if anyone has suggestions for other lenders who might offer better rates.

I did explore a construction loan, but unfortunately, it didn't work out because the lenders said this is my first time constructing, and they were hesitant to move forward.

Once everything is said and done, the total cost of the property will be $210K. Comparable homes on the street have recently sold for at least $340K, but those homes have a maximum of 6,000 sqft. My property, however, has a 17,000 sqft lot, which offers potential for a future multi-family development. While I don't plan on flipping the house, I intend to use the property for short-term rentals (STR), and based on my research, it seems like it will perform well either as an STR or a long-term rental (LTR).

Any ideas on how I can source the financing or recommendations for better lenders would be greatly appreciated!

[Sasha Mohammed]

Do you have access to a credit union? Reach out to them for terms on a HELOC. should be much better than Better.

One look at that and i would tell you it's wayyyy too high, but there's not enough info from your post to determine what is contributing to that interest rate. The advice i'll give you is to shop. CU's are doing really well on rates for HELOC right now.

if you can get close to finishing the project w/ a HELOC, this is not a bad play. Private money (like true private money) may not be a bad play either, just make sure you trust the individual you're working with. lots of scammers out there.

BOL!