Posted by Marc in Portland on March 17, 2001 at 13:59:49:
You should be able to get, fairly easily, some hard money with an LTV of about 65% in your local area. Check your Sunday paper’s classifieds for the “money to loan” section and also in the yellow pages. You’re looking for ads that say, “poor credit OK” or “any property considered,” things like that.
“Hard money” is simply financing provided by private individuals, not banks. There are brokers who specialize in finding such funding specifically for projects like yours. Generally, the loans are “interest only” and have terms of about 1 year. Expect to pay about 5% to acquire the loan and 15% interest, but if you figure these costs into the cost of your project, it’s worth it. On a “purchase & rehab” loan, they will generally always make sure they aren’t invested at more than the 65% level…they’ll cut a new check at stages as you improve the property.