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Hard Money Loan for a Fix and Flip you already own
Ryan G. WrightMay 1, 2024 1:25:29 PM3 min read

Hard Money Loan for a Fix & Flip That You Already Own

In this blog post we are going to be breaking down how The Investor's Edge can help you get a hard money loan for a fix and flip on a house that you already own.

So you found a property in distress, bought it, and have started the rehab. What happens if you run out of money for the rehab. Watch the video below to see how we can help you:

If you would like to talk to one of our Investment Associates about your fix and flip to see if we can help, register for the Webinar and we will reach out to you:

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Will you do a loan against a property that I already own?

Well, the quick answer to this is yes.

If you already own a property, this is considered what's called a refinance. Now with that, we actually have to be in first position. What that means is that we have to either pay off or there aren't any other loans on the property. So let me give you an example here.

So let's say that you've got this property and let's say that you bought it and you put, I don't know, a hundred thousand dollars into it and maybe you've done some rehab and you put another twenty thousand dollars into it, but you found out you need another fifty thousand. Well, what can we do? Well, we can come in. We can give you a loan for that fifty thousand dollars.

You can get the rest of the rehab done on the property. You can sell it and make your money back. Now let's say that you're working with another lender. Let's say that you've got a lender that you owe a hundred thousand dollars to, and you've run out of rehab money and you need additional fifty thousand dollars of rehab money, what we would do is we would come in and do a refinance and we would actually pay off this lender and give them their money, and then we would put the rest of the money ready to go for escrow, for rehabs to be done to the property.

Now it's gonna go through the same process. It's gonna need to be valued. The scope of work is gonna need to be looked at, and making sure that it's still gonna be a profitable deal once all those things are done. These are not owner occupied properties.

These are only non owner occupied properties, which means you can't live in that house now or through the duration of the loan at any time.

Now on occasion, you can have somebody live in the home that is a renter, but that has to be approved in advance by the lender in writing before that can happen. So how do we actually make this a reality? It's really a purchase.

We call it a refinance for simplicity's sake, but what's happening is the new LLC or special purpose entity is actually buying the property from whoever currently has title to that property, but it essentially looks the same as the refinance.

Now once all the work is done on the property, if you refinance that and get a new loan, you're welcome to move into the property or do what you'd like to with that property. So now you may be asking, how do you actually do this deal of a refinance, going through the advanced deal analysis and using that? Well, what you're you're gonna wanna do is use the same ADA, advanced deal analysis. And for the purchase price, you will put how much is owed to the lender. Or if you don't have a lender and you used your own money, you'll just put one dollar in there just as a placeholder.

Again, as long as your current loan balance, if you have one, your your, rehab, your points, your interest, and closing cost all fit under the seventy four percent of the after repaired value, we can do a hundred percent financing on this refinance deal.

If you want to learn more about real estate investing with me, click the button below for a quick webinar where I explain more about how all this works:

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