Best Financing for rehabbed "rent to own" / lease option property

[Bryan Stell]

Hi Guys, I am underway on a flip with ARV 300k. I bought for 185 and will probably put 60K into the rehab. I hope to have it on the market as a rent-to-own by July. I put 10% into the deal and will finance the entire rehab using my existing home equity line. My uncle financed the rest. Since it was his first deal with me, I am giving him 15% interest with 1 point if I re-finance out of the deal within the first 3 months. So basically he makes a minimum of 6K for being the transactional lender, as he put up 170K so we could close quickly.

I now am at the point where this "rough" property will qualify for a bank loan. I don't want to just sell it immediately as most of my estimated 30K profit will be eaten up by taxes. I want to do a lease option. What would you say is the best way to re-finance this property cheaply as I can't afford to continue paying my uncle 15% I may shop around and go to my uncle with the deals I have lined up and see if he'll beat them, IE now that the property appraises for 300K and has a lease-option tenant, will you continue to finance it at 5-6% instead of having me pay the fee's associated with setting up a mortgage.

The goal is A.) have my uncle continue to lend to me.

B.) Obtain new lending terms on this property as 15% is not sustainable.

C.) Maximize profit over time by avoiding taxes.

Thanks!

[Chris T.]

The local banks or credit unions usually offer the most competitive rates. Reach out to local experienced investors in your area and ask for referrals. Warms calls are always easier than cold calls.

And try the banks you're already working with, esp the bank that gave you the HELOC.