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California Hard Money Loans for Rehab and Construction Completion

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Mortgage and Lending with All California Lending BRE# 01458390

There are a number of scenarios where you may be looking for California hard money rehab loans for rehab and construction completion.  You may be purchasing a property that you intend to flip.  You may own a property that you want to ready for sale.  You may even own a home that you want to improve or add an ADU.  These are all scenarios where a hard money rehab loan could be a good resource.

For many investors, having cash on hand is paramount.  Being able to leverage the maximum amount possible allows investors to retain more cash.  This cash is important in case of overruns or delays - or to have the ability to get into additional opportunities that may present themselves.

With a hard money rehab loan for fix and flip purposes, you can typically leverage the after-repair value of the property - or ARV - and use that as the lending basis.  This is opposed to using the acquisition price as the lending basis.  Being able to use the higher value means more leverage, less cash into the project out of pocket, and more cash on hand for reserves, overruns or new opportunities.

For those who already own property, we can still use the after-repair value as a basis for the loan.  Many people own rental properties that they want to sell.  Typically speaking, these properties will sell for more with upgrades.  These upgrades can range from simple flooring and paint to more extensive remodels, updated kitchens, landscaping - even additions.  A rehab loan can be a good solution in this situation as well.

These types of rehab loans can come in multiple flavors.  Depending on the existing debt owed on the property, the current market value and the after-repair value, there are options to consider.  One option is to do a whole new loan.  Another option is to do a second position loan, leaving the existing loan in place. 

This can be an attractive option for multiple reasons, including saving on loan costs and saving on higher interest payments.  While a second of this nature likely will carry a higher interest rate than doing a new first, often times the blended rate between the higher cost second and the lower rate first will be less.  These second position rehab loans in California can help position a property to sell for top dollar rather than needing to sell a property in "as is" condition and accept less.

There are many ways to structure these rehab loan transactions, but with some basic information a high-level discussion is possible.  For purchases, the purchase price, cost of rehab and after repair value are the most important numbers to know.  For refinances and/or seconds, it is most important to know the existing debt, the current value, the cost of rehab and the after-repair value.  With this basic information typically a determination can be made as to what your options are.

We specialize in hard money loans in California, and we do a lot of rehab financing.  If you have questions or want to discuss a particular scenario, we are always available to speak!

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