How soon can i refi a hard money loan to conventional?

[Brett Lee]

I am looking to purchase a house for 280k that will resell for 380k+ in this market after some updates. I have 2 options to purchase. 1. Pull heloc out of another property to put 25% down(about 70k). 2. Option 2 is buy with hard money loan and rehab to flip or refi and rent out(it would rent for $2000+). Which option would you do? Also, if i buy with hard money how soon would i be able to refinance if i want to hold the property and rent it out? Any advice would be greatly appreciated!

[Stephanie P.]

Originally posted by @Brett Lee:

I am looking to purchase a house for 280k that will resell for 380k+ in this market after some updates.

I have 2 options to purchase.

1. Pull heloc out of another property to put 25% down(about 70k).

2. Option 2 is buy with hard money loan and rehab to flip or refi and rent out(it would rent for $2000+).

Which option would you do? Also, if i buy with hard money how soon would i be able to refinance if i want to hold the property and rent it out?

Any advice would be greatly appreciated!

 The numbers always tell you what to do.

In this case, the numbers tell you to buy it, fix it and flip it.  

$210,000 at 5.5% is 1197. Add taxes and insurance in and you're around $1500. Add the cost of the HELOC and you might break even before management fees and CapEx.

Using the same 210K as a mortgage, updates of around 20K (my guess) and  then carrying costs, you're in for $250,000. If you sell it for 380K, you get your 70K down payment back plus about 45-50K in your pocket after closing costs and Realtor fees.

Take the money and run.

Stephanie