Vendor Portal
In a recent episode of the Straight Up Chicago Investor Podcast, guest Perry Farella shared invaluable insights into groundbreaking financing options for real estate renovations. Let's dive into the key takeaways from this week's Tuesday Tips session.
The podcast kicked off with Perry introducing a game-changing product from First Community Mortgage Bank—the two to four-unit Fix and Flip renovation financing option. This innovative loan serves as a viable alternative to hard money lenders, catering to the needs of both house hackers and investors looking to transform two to four-unit buildings.
Highlighted as a hybrid loan with characteristics of both conventional and hard money loans, this financing option boasts an interest-only payment period for the first 9-12 months and a reasonable 25% down payment requirement. Credit scores play a pivotal role in determining interest rates, with the unique advantage of counting rents toward loan qualification.
A standout feature of this loan is its balloon mortgage structure, offering a term of up to 12 months. However, Perry cautioned listeners that penalties apply if the deadline is exceeded. The loan can be repaid through property sale or refinancing into a conventional 30-year fixed-rate loan. The appraisal process considers after-repaired value and rental projections, a unique feature compared to conventional hard money loans.
Transitioning into the next segment, Perry discussed a novel lending option in Chicago designed to simplify the rehab funding process. Unlike the FHA 203k loan, this product offers a smoother experience for investors by eliminating the need for a self-sufficiency test or a HUD consultant.
With no prepayment penalties and an in-house draw process, investors can bypass the traditional involvement of title companies. The lender sweetens the deal further by providing up to 30% of the rental budget in a check to the contractor at closing, promoting liquidity. Loan limits align with existing conventional loan limits, and strict guardrails ensure borrowers maintain reserves and adhere to debt-to-income ratio caps.
In the final segment, Perry explored a lending option tailored for those embarking on seven-figure rehab projects. The option includes a contingency reserve to protect all parties involved in the process, coupled with competitive fees rivaling hard money lenders.
To learn more about these transformative lending options, Perry directed listeners to visit howtofundrenovation.com, where detailed information awaits.
Perry Farella's Tuesday Tips on the Straight Up Chicago Investor Podcast unveiled a wealth of financing options for real estate renovations. From the two to four-unit Fix and Flip option to streamlined rehab funding in Chicago, and even seven-figure solutions, investors now have a range of flexible and accessible choices to turn their renovation aspirations into reality. For more information, explore the offerings at howtofundrenovation.com and stay tuned for future insights from the Straight Up Chicago Investor Podcast!
Watch Straight Up Chicago Investor Podcast Episode 237 in Full Here
Show Notes:
How do you navigate a low inventory & higher interest rate environment
Connect with Mark and Tom: StraightUpChicagoInvestor.com
Email the Show: StraightUpChicagoInvestor@gmail.com
Guest: Perry Farella
Sponsors: Perry Farella - First Community Mortgage
Chicago Investor Resources Shared
What You Must Know About Renting Your Property In Schaumburg
Survival Guide For Self Managers - 15 Tips Chicago Landlords Must Know(Especially House Hackers)
Want extra Hacks & Tricks? Follow us on Facebook & Youtube!
Looking for a breakthrough in your career? Join Our Team!
SUBSCRIBE on to our podcast on iTunes | Spotify | Stitcher | TuneIn Radio
