Choose Your Property Wisely
Do you have cash on hand equal to 10% to 15% of the project cost?
$250,000 ARV is required for Chicago and Dallas (suburbs might be less)
Is the property located in an area where you may visit it frequently, to check on its progress?
Would you feel totally safe going to the area to check on the house at night?
Use common sense and caution!
The property must be in a decent area.
Would you live there yourself?
Would you enjoy visiting with the neighbors in the front yard at dusk?
Have you checked the crime statistics for the area?
A neighborhood with many board-ups is not a good area.
A cheap purchase price for the investor is not necessarily a good deal.
Are you buying directly from the owner or record; or, are you buying from a "wholesaler" (i.e., middleman) who is charging an assignment fee which causes your deal to be marginal? RMAC Lending scrutinizes these deals.
Look for areas where other rehabs are happening.
Where are fully rehabbed houses selling quickly, with few days on market?
RMAC Lending will not do any deal if renters, or any other persons, are in the property during the final walk-through before closing.
Does the house have a swimming pool? We will not finance houses with swimming pools.
Is the property in a flood zone? We will not finance flood zones.
Are there pre-existing building violations? We might not finance such houses, depending upon the circumstances.
Have you made REALISTIC repair estimates? We will turn down a loan when our customers provide unrealistic cost estimates.
If your plan is to "rehab and refinance for rental," (getting permanent financing to pay off OUR loan) the ARV requirements may be lower, depending on the area. Call for guidance.
If your plan is to rehab and lease to a tenant (while our loan is still in place), you must first obtain our approval and these deals will be scrutinized. We don't want our loan repayment dependent upon a future unknown "rent to own" occupant. You must have the financial strength to refinance the property and pay off our loan at the time of leasing, and again, you must obtain our approval for this plan.
Rapid Money Access Connection