Private lenders and refinancing

[Nick Tran]

Hello everyone!

I purchased $186,000-SFH in Virginia using private lender a month ago. I have to pay the payable amount plus interest back in 3 months. Right now, I have been rehabbing the property. ARV is $400K. I want to refinance to take the some cash out and pay off the loan. However, couple mortgage companies told me that they would only loan me 70%-80% of the purchase price. Moreover, the financial agent said that most banks wouldn't lend money to any buyers in this situation, only cash buyers ( I was considering selling the house.) It has to be a year later.

I'm thinking of getting another private lender to pay the first loan. Have you guys heard of the WPI lender (Wholesale Properties International), which I found on the internet? They provide AVR loan, rehab loan, purchase loan, etc., but they require $4,000 deposit.  

Any insights would be most appreciated.

Thanks so much!

[Jeff Rabinowitz]

I do not know this company but i would never pay a deposit for a loan.  I might pay a small application fee (though I never have) and it is reasonable for the borrower to pay for appraisals, a survey (if needed), etc.   If you are paying for services you should either pay the service provider directly or make it clear that the payment you make to the broker is for those services.  What recourse do you have once you pay the $4K?  I suspect very little.