All Forum Posts by: Jonathan Morris

Alex,
Let me make sure I have this right because I agree that a general contractor would increase expenses. I do not need a general contractor. I was under the impression that I would need a general contractor for two reasons. 1) The Hard Money lender would require it since I have no experience and they would not want to lend money out to someone who was hiring sub-contractors when I have no experience to do so, and 2) If a permit needs to be used, I thought only a general contractor could do that, not me.
Thanks for the insight so far everyone!

Jon,
Thanks for asking. I have $25,000 of my own money I could invest in it. I would have to utilize a home equity loan on my house but that would not be an issue. Obviously a lender is much more enticed to give the loan if I have "skin in the game." The ARV of the houses I would be looking at are between $250,000 and $300,000.

I want to begin rehabbing houses. I know I am not at the point where I can start because I need to educate myself more on the subject. I know that I would need to utilize a hard money loan as my best option for the first rehab project, if not the first several. The most difficult part in securing the loan would be the experience level. I have none. Please give me your thoughts on using a hard money loan in my situation.
My thoughts are that initially I would speak with local HM Lenders to see what they require and their rates. After that, I would use a general contractor to get a quote on the house with itemized repairs. I would present the quote to the HM Lender when I specify how much money I would need and to ensure that my figures are profitable for both HM Lender and me. I would present the lender with very detailed analysis of the numbers, including: purchase price, comps sold in area, General Contractor quotes, percentage set aside for overages, exit plan, etc.

Please give me your experienced thoughts on this subject as to whether this is possible or am I just unrealistic in getting HM loan without experience.

Thanks