|
By using a rehab
loan, many real estate investors are able to take advantage of
additional real estate opportunities in today's market.
A rehab loan can
aid a real estate investor by allowing them to leverage their
existing cash.
A rehab loan is
typically based on an after repair value of a property. Most
rehab loans are made to investors for investment properties, and are
typically short term loans, 6-12 months.
The typical rehab
loan is interest only, and carries no prepayment penalty. The
rehab loan is geared towards the "fix and flip" investor, although
it can also be used by investors looking to buy and hold.
Investors looking
to buy and hold typically will be looking at two separate
transactions. The first, the rehab loan, will allow them to
acquire and rehab the property using the after repair value.
Once the property
is rehabbed, and ideally rented or leased, a second loan can be made
that is more long term. This loan can be more traditional, as
it will not need to rely on an after repair value. Instead,
since the rehab has been completed and a renter potentially found,
we can use an "as is" value.
Working in two
steps like this is more expensive, as the investor is paying fees on
two separate loans, but it is a way to acquire properties for the
long term with the least amount of cash out of pocket.
For more
information on our rehab loan offerings, please contact us via phone
or email. You can also visit our
investor rehab loans page for
details and examples of rehab loans we are able to facilitate.
|
