Good afternoon
Here's my current situation. Myself and business partner currently have $15k in a business account and a SFH owned free and clear. My business partner has been in construction for over 25 years so our rehab budget seems lower for what we're trying to build. The house is located in Atlanta near the beltline. The purchase price is $167k with a rehab budget of $70k. The comps are est $350k with the house next to it selling for $370k in Sept 18. The problem I'm having is that our current lender will not provide a preapproval letter for the loan. We intend on using the SFH as cross collateral to cover downpayment/closing costs. The seller will not accept an offer without a preapproval letter.
One option from another lender was to cash out/refi the SFH and use that the close the fix/flip loan. The house is vacant so we would be holding two high interest notes. I didn't like that idea.
Another option was a 15/30 year mortgage or HELOC to get cash from the SFH but that would take 30-45 days.
Another option was to find another investor willing to JV and help secure the financing and we split the profits at the end.
We've looked at other lenders but most want liquidity to be 1/3 of the loan requested, even if we use the SFH as cross collateral or cash out/refi the SFH at a high interest rate.
Any advice would be helpful. Thanks in advance.
