Rehab Loans

By
Mortgage and Lending with Peoples Home Equity, Inc.

With reports of record foreclosures, and more to come, now is a great time to be purchasing investment properties.  Many of the investors I work with have been utilizing Rehab Loans.  They are great for properties that have good potential, but need work.  Distressed properties are great because you can get them for a fraction of the value.

With a Rehab Loan you can get cash at closing to do the repairs necessary to help fix and sell the property.  The investor gets up to 80% of the After Repair Value.  This gives plenty of cash to the investor and protects the lender (to an extent) if the loan defaults.

Quick breakdown of Rehab Loans (example):

Purchase Price - $100,000

After Repair Value - $200,000

Loan Amount - $160,000

You will have $60,000 after purchase to do the repairs, then you can rent or sell the property and gain the difference.  The key is finding properties in areas that have good potential. 

I hope this helps anyone out there needing any information about Rehabilitation Loans.

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Rainmaker
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Larry Brewer - Benchmark Realty llc
Benchmark Realty LLc - Nashville, TN
Clint - good post, most people don't know about these types of programs, but it could come in handy.
Jan 21, 2008 09:44 PM #1
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Rainer
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Clint Haynes

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