Are you trying to figure out how to finance rehabs to rent at 100% and get cash out? We all know everyone is looking for 100% loan to value on their deals. Here is how you can used our programs (rehab arv loan and then our soft money loan with no seasoning) to fund your rehab to rentals at 100% loan to value, even in some cases get cash back at closing.
Let’s look at this example to see how
Purchase price 100k
Rehab costs 50k
Title + Origination fee $7000 (estimated)
Cash from borrower at closing $30,200 (20%)
Estimated ARV 56.37%
Total Loan amount $126,840
You’re in this deal for 30k out of pocket (this is the rehab loan part) , you complete the property and its now worth 225k.
30 year loan at 75% loan to value
$225,000 x 75% = $168,750 max loan amount
$161,250 loan amount – $126,840 (balance owed on rehab loan) = $41,910 cash out on 30 year loan (less fees below)
$168,750 x 4% (points on 30 year) = $6750 (comes out of loan proceeds)
$41,910 cash out – $6750 (points) – $1200 (estimated title fees) = $33,960 net cash out to you
As you can see above you can purchase, rehab, refinance and hold long term (30 year fixed rate) and end up putting $30,200 in for the rehab portion and walking away with $3700 more than you put in the rehab loan and own this property with NO money in the deal when all is said and done.
This program when used correctly can let you keep turning the same money over and over without having to keep trying to raise money constantly, sell assets or keep on refinancing ever year to try and pull equity from wherever you can.
If this is your strategy – purchase, rehab, hold long term for cash flow rental income check out our loan programs in full here