I'm looking for hard money loan to add more sq.to my house,then sale it. The house is free and clean with no lien.The tax value is 690k.

Asked by Jiggy, Austin, TX Sat Jun 4, 2011

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Marco Bolado, , San Antonio, TX
Sat Jun 4, 2011
Sorry Jiggy but you'll be hard pressed to find any HML to do this for you. What your asking for is a homestead cash out, Texas A6 Loan. Those can't be done with hard money. State laws prohibit fees from exceeding 3% of the loan amount and intererest rate threashold is 12% i believe. Both of these provisions alone eliminate hard money right away. You need to try and obtain a home improvement loan from a local credit union. That's your best option.
1 vote
Don Groff, Agent, Austin, TX
Mon Jun 6, 2011
Yeah, lots of good comments. I know a lot of agents and investors who have done similar things only to end up coming out of pocket or breaking even at best. Just make sure you do your homework and do not use pie in the sky valuations or you can really get yourself into trouble. Granted the property has no lien so that is a plus as you will be able to get out of it no matter what but it probably makes sense to sell the property and use the proceeds for other investments.

Again, this is coming form not having any knowledge about the property aside from the tax valuation so just make sure you know what you are getting into.

Best of luck to you.

Don Groff
REALTOR | Mortgage Broker | Consultant
Keller Williams Realty | 360 Lending Group
o.512.669.5599 m.512.633.4157
0 votes
Doug Vogelsa…, Agent, Austin, TX
Sat Jun 4, 2011
Smart answers abound, Jiggy. I can't add more than what has already been said.

Peace and good luck.

Doug Vogelsass
0 votes
Don Tepper, Agent, Burke, VA
Sat Jun 4, 2011
That's a bad idea in any case. And it sounds as if Marco is familiar with Texas regulations that would prevent you from doing that.

If the house is free and clear, then get a home equity loan or home equity line of credit. Then use that credit line or loan to expand your home. Another option--not as good as a HELOC or home equity loan--is to find a contractor who will arrange financing.

As others note, the tax value doesn't mean a thing.

And no hard money lender would lend to you for that purpose, anyway. Hard money loans are made to investors, not for primary residences.

So: Consider a HELOC or home equity line of credit. Failing that, find a contractor who offers (or can arrange) financing. Forget hard money loans.

Oh, and check with a Realtor to make sure that adding on to your house would return more than the cost at time of sale. Considering the hassle, expenses, etc., you should be looking at a return of 1.5 (for instance, if you spend $10,000, you should be able to sell your home for $15,000 more) on any construction or improvements you do.

Hope that helps.
0 votes
Scott Butcher, , Austin, TX
Sat Jun 4, 2011
Hi Jiggy,

Here is my 2 cents, first, I'd check with a Realtor you trust to first price out selling your home 'as-is' and then take a look at it 'as-improved' and figure out if you can NET a substantially higher profit that goes well above & beyond what your NET proceeds would be for selling the home in its current state. As I'm sure you already know that you have the time value of money working against you should you elect to improve your home.

Here is another factor to consider, if you sell now you'd be placing your home for sale at the best possible time of the year and get the advantage of listing into the peak of the sales season. IF you were to spend time getting a loan & doing your improvements, then your probably not hitting the market until Fall and you've missed the best window to sell your home quickly, unless you competitively price it to sell and that's the opposite of why your doing this.

If you plan on proceeding with the improvements, then I'd suggest in order or priority you'd look at the following:
1. Home Improvment Loan (don't do a Line of Credit, you want the fixed rate debt)
2. Cash Out refinance
3. hard Money

I can either provide or suggest others for all 3. let me know if you need a suggestion.

Good luck.

Scott Butcher
Mortgage Banker
Maker Capital Group, LLC, an Ameripro Funding Co.
0 votes
Dp2, , Virginia
Sat Jun 4, 2011
The tax assessment and current market value (CMV) are 2 completely different things. Before you go forth with your plans, you might want to order an appraisal and BPO to determine whether or not you'd be able to recoup that investment upon resale.
0 votes
John Crowe, Agent, Austin, TX
Sat Jun 4, 2011
Contact Manana Funding. They provide hard money. If you need a number, send me an email - john@crowehomes.com.
Web Reference:  http://www.crowehomes.com
0 votes
1st Zero-Emi…, , Austin, TX
Sat Jun 4, 2011
Money is cheap cheap to borrow from banks and lenders right now. Why do a hard money where the rates are higher??
Additionally, why add square footage and then sell? Let's get your house sold now and get you moved on without the headache.
Plus, add-ons to homes are known for causing foundation issues in the future as the normal and consistent contractions of the home will change when additional sqftg is added.
I can explain more in detail.
Let's talk about the resale features of your current home as is, if you truly plan to sell and move on.
Phone or email me for a brief chat about money, the market, and returns on add-ons.
0 votes
Teresa Rober…, Agent, Austin, TX
Sat Jun 4, 2011

There are different options available, such as cash-out refinancing, home equity line of credit and others. I work with several lenders for you to compare products to see which ones best fit your needs. Having done multiple complete remodels, as well as taking an home equity line of credit (as we own our home with no liens, as well), I understand what you are trying to accomplish.

Since your ultimate goal is to sell your home, as a realtor actively working with sellers in Austin, I would be happy to meet with you to discuss which additions would bring you the most return on your investment.

If you would like to discuss further, give me a call and we can arrange a convenient time to meet and discuss your options.

Teresa Roberson
Roberson Residential, a Private Label Co.
Realtor®, GRI174®, CNE­­
0 votes
Scott Hayes, Agent, Austin, TX
Sat Jun 4, 2011

I know several hard money lenders that can assist. One of which, I am currently working with on a project, and is located in the greater Austin area. Feel free to phone me or send an email with additional details, and I will be glad to follow up.
0 votes
Elliott R. O…, Agent, McLean, VA
Sat Jun 4, 2011
Why do you need hard money if your house is free & clear? Hard to get hard money on owner occupied homes but it may be possible.

Care to give me more details on how much you need and for how long??

Elliott R. Oliva
Mortgage Banker
Envoy Mortgage
512.825.8309 direct
Se Habla Espanol
0 votes
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