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Rehab Loans
The Catch-22
Situation
The purchase of a property
that needs repair is often a catch-22 situation, because banks
normally will not lend the money to buy the property until the repairs
are complete, and the repairs can't be done until the property has
been purchased.
Doing the math is simple.
You can borrow
up to 75% of the future/finished value
of the property! Take the cost to purchase the property and
add the cost of renovation/repairs. This total is called the "cost of
acquisition and rehab". As long as the finished property would
appraise for 25-30% more than the total cost of the project, the
property will most likely qualify.
A rehab loan offers many advantages. The
scope of the project is limited only by your imagination and the
finished value of the property. We have had many clients with
rewarding, successful projects who created equity and a wonderful
place to live by using our rehab loan products. |
