Today’s real estate investors have found purchase rehab loans the answer to their investing needs. Purchase rehab loans are a combination loan. Part one is used to purchase the investment property, and part two is used to advance monies for needed repairs.
Many times, real estate investors need funds after closing to updated the kitchen and baths. Other times the property is just to small, and would be better used as a rental or flip if there were a more bedrooms, additional closets or storage added.
Our response to the market place is, we have created our Purchase Rehab Loans program. You can purchase an investment PLUS add the cost of improvements to the loan.
Here is how it works, after you find an investment property to purchase. you figure out how much work the property needs, you submit this construction schedule and estimate with your loan request.
On the day of closing, the seller gets their agreed to sales price and the additional funds are put in a construction account for the investor to complete improvements. Draws are made as the work progresses.
An appraisal is completed based on the ‘subject to’ completion of the work, so that you know the true value. Remember, some improvements will only bring a home up to standard value, not increase the value.
A contingency factor of 10% is allowed in the construction costs and put into the transaction. This can either be paid by you at closing or rolled into the construction portion of the loan.
The purchase rehab loans is an Interest Only payment at the closing of the loan and during the construction phase of the project.
Once the work is completed, the purchase rehab loan is refinanced or modified to the final end loan. This could be a 30 Yr Fixed rate loan, a 15 Yr Fixed rate loan.
To apply for Purchase Rehab Loans click here