Rehab Loans
By Anuradha Atharva
Rehab loans are typically used by investors who want to get in and out of a real estate transaction in a short period of time. Investors locate a property that needs rehab. Depending on the experience of the investor, the property can need light, medium or heavy rehab.
The cost components under consideration are the purchase value of the property, the rehab costs involved, the cost of the rehab loan and the After Repair Value (ARV). The purchase price can be negotiated with the seller of the property. Investors with prior experience have good connections with Contractors to get the rehab costs as low as possible. Most investors take a loan for a short period of time to hold the property until the rehab is being done. Using a loan or Other People’s Money vs. using own cash accounts for better leverage of money.
What to look for in hard money rehab loans:
* Time to get funded
* Documents needed
* Prepayment penalty
* Rate and terms
* Loan to Value: LTV
Lately, rehab loans are available for 100% of the purchase price plus the rehab costs up to 75% of the ARV. As an example, consider a home for a purchase price of $300,000 and a rehab cost of $50,000.
If the ARV is $600,000, then the borrower can obtain a loan of up to $450,000. This means that the borrower does not have to put any money from his pocket to close the transaction. Within 3-6 months, he can flip the property and move on to the next one.
For more information or to pre-qualify for a rehab loan, visit us at http://www.save-home.com/free-rehab-loan.html and you will receive a response back promptly. 100% funding can be obtained with no money down.
Anuradha Atharva is an Independent Consultant in San Francisco, California and offers creative solutions for real estate investors and investments.
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