All Forum Posts by: Christian Rodriguez

None of the renovation loans require you to hold the loans, that’s absolutely not true, it is false!!! That’s not allowed on the conventional market. I refinance them myself after 6 months once repairs are done if they build 20% in equity so we can get rid of the Mortgage Ins, that’s in case you want to hold on it, otherwise you just sell it. Bankers loose their compensation if a buyer refinances after making less than 5 payments on the loan which is not the case on the flipper either since you need time to get permits, do the work and finally sell it.

FHA 203 k is for owner occupied, many buyers use the loan and Sell after repairs, obviously no one lives in the unit during the repairs and mortgage payments are actually rolled in the loan during the construction, so technically is owner occupied by is really an empty unit during construction and you are free to sell after.

It's just a matter of figuring out if you can do. FannieMae HomeStyle or a 203k FHA.

Let me know if I can assist you in any way

Thanks Diana and Bill! I am a bit confused on what you are saying can you elaborate on the specificity of the loans you are speaking about? You are mentioning the 203k loan which requires me to live in the property for x amount of time. I wanted to avoid that at the beginning because I only have about 33k in the bank and if I get into a 203k I need to put in money towards the house that I won't be able to get back until after a year, if the property is sold. I will then not really have much money left for further investing until then. That is why I wanted to get into fixing and flipping first. However you are more experienced than me. What do you think I should start off with? Is it a bad idea to try to use a hard money loan on my first property, which in fact would be a fix and flip property? What do you think may be a smarter way to approach real estate as a first time investor with not much in the bank. Also, which renovation loans are you talking about that do not require me to live in the property?

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Originally posted by @Caleb Jordan:

Originally posted by @Christian Rodriguez:

Hello everyone I am brand new to Real estate and have been searching for the answer to my question for a while now. I am currently interested in buying and flipping homes and I have been studying the topic and reading books but I still have some broad questions that hopefully maybe someone can answer. I’ve spoken to a gentleman at a financial mortgage bankers Corp. about a hard money loan for a buy and flip property. He told me what I have in the bank is not enough to cover hard money loan fees (such as interest and down payment) but I’ve read and listened to podcasts that stated I don’t need so much to start. I wanted to use a hard money loan to buy and renovate the property however he told me I need to fund the down payment, closing costs, and renovation on my own and then they reimburse the money for renovations once the renovations are complete. I unfortunately don’t have enough money to renovate a property so I thought that buying and flipping wasn’t not for me. However BiggerPockets has me thinking it is possible. Unfortunately I have tried to raise money from friends and family but of course as a beginner, no one believes in me yet. So my question is:

1) Is there such thing as hard money loans that can fund the deal and renovations at the beginning of the deal?

2) How else can I fund renovations if I can’t find a hard money loan that’ll fund the deal from the start?

Fees for Hard money vary based on lender, size of loan and how much they are funding. 90% funding on the purchase and rehab is easy enough to find if you have some experience, 100% will be rare.

You will have to pay closing costs (things like insurance, appraisal, title insurance) plus some lender fees, they will vary greatly between lenders and products. After closing costs and fees you could easily pay 5% to 10% of the loan amount.

You will probably need 6 month reserves that covers taxes monthly payment.

Hard money lenders usually require you to start rehab out of your own pocket. The money is released in increments, called draws, as the work is completed. If you have a 45k rehab you bring 5k, the lender brings the other 40k. You start the project with your money then they give you the 40k in chunks called "draws." A plan is set up before for your rehab as to when you get that money. Usually it is as you complete various items, then they give you another chunk of the money and you complete more of the rehab and then get another portion of the money and so on.

Thanks so much! So it seems I have to have reserves in the bank even when dealing with hard money loans. Maybe fix and flip is not for me? I have about 33k in the bank to invest in real estate but I don't think that would cover working with a hard money loaner since I have to cover the rehab at the beginning and closing costs. I was thinking about a private money lender to work with but I don't know any myself. Maybe I should look into a private money institution?

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@Diana Muresan Thanks so much, I believed that if you use the 203k loan then it must be owner occupied for a year before selling? I wanted to fix and flip in a matter of months.

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Originally posted by @Aaron H.:

1) Yes. It sounds like you're talking to a banker, not a "hard money lender". They're going to be a lot more conservative and require larger down payments/reserves. Call another 20 hard money lenders in your area, someone will be willing to work with you if the deal is good enough. Most lenders will still want you to have some kind of money in the bank, but the terms vary widely. Don't take one "no" for an answer. The better the deal gets, the more likely you find someone that wants to underwrite it.

2) Take out a HELOC on your primary residence. Go to local REIA meetups and find a more experienced partner to work with on your first deal. Save up money for a year until you have enough to really get started safely. Not really recommended, but there are also plenty of examples of people using credit cards to fund their first reno. Usually a very bad idea, but I'm not going to pretend to know enough about your situation to tell you what to do.

Thanks so much for your response! Unfortunately I do not have a home of my own but I will keep trying for other hard money lenders. I also will be attending a local REIA in hopes that someone will team up with me on something. Any other suggestions on funding a Reno?

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1) Is there such thing as hard money loans that can fund the deal and renovations at the beginning of the deal?

2) How else can I fund renovations if I can’t find a hard money loan that’ll fund the deal from the start?

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Thank you. How do I attend? I texted the number my name but haven't received a response.

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Hello, will you guys be speaking about different strategies to fund a home? Like the BRRRR strategy, partnerships, fha mortgage loans etc.?

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All Forum Posts by: Christian Rodriguez

Christian Rodriguez has started 5 posts and replied 27 times.

Post: Buy & Flip with Hard Money Loans

Post: Buy & Flip with Hard Money Loans

Post: Buy & Flip with Hard Money Loans

Post: Buy & Flip with Hard Money Loans

Post: Buy & Flip with Hard Money Loans

Post: First Time Buyers - Bronx NY

Post: First Time Buyers - Bronx NY