Rehab loans, or what some would call renovation loans, have been around forever. TV shows “Flip It to Win It” and “Flip this House” with numerous other TV programs have recently made these types of loans more common and have more people asking “What is a Rehab Loan?”
Most conventional lenders will not finance property that needs a substantial amount of work. Rehab loans (aka, rehabilitation loans) have filled some of the needs especially to investor-type buyers with numerous bank-owned and distressed properties still flooding the market.
Rehab Loan General Guidelines
When understanding what a rehab (rehabilitation) loan is, we need to understand that the general guidelines for rehab loans vary from lender to lender, but they all have a few general rules to keep in mind.
- You must have some of your own money in the deal; what we like to call “skin in the game.”
- Does your team have any experience rehabbing property? You need reliable, experienced contractors.
- Is your construction budget realistic?
Keep in mind that most rehab lenders will look at your budget and factor in additional contingencies. Often we find that borrowers don’t budget adequately for labor because they are planning on doing the work themselves.
As an investor, having a great relationship with a reliable rehab lender is a must. Liquidity is the name of the game in real estate and typically with most rehab lenders once you have a few deals under your belt with them the easier it is to obtain financing.
What is a rehab loan at LHJS Investments, LLC ?
What sets LHJS Investments, LLC apart from the many other lenders out there is that we specialize in large loan amounts and are very creative in structuring our loans. Our Rehab Loan program offers loan amounts of $400,000 to over 4 million dollars while other programs top out at $400k.
We will typically lend up to 65% of the ARV (after renovated value). One of our team members will personally walk the property–often within 48 hours from your loan submission. We have our funds available and we do not have to wait to get investor approvals. We are based in Northern California; however, we lend throughout the state. Our Rehab Loan programs are helping investors create some very successful endeavors. We look forward to hearing from you for all of your rehab loan requests, in addition to our many other private money loan programs.
Visit us at http://LHJSinvestments.info to apply for a Rehab Loan or any other Real Estate Loan. If you are looking for additional information about What is a Rehab Loan, contact me directly.