Basics of Investing

Question: OK, so I want to start rehabbing real estate, and have a plan… but how does one finance this?

I am a student (university) who is getting ready to finish and move on with his life. I have a wife and child and I’d say I’m fairly competent with a hammer and saw (a figure of speech). I have a collection of trusted contractors and I have several 3-ring binders (at least 10) with a plethora of plans and design products/ideas that I have amassed throughout the years. These range anywhere from counter tops, to drywall, to floor plans. The only thing I have left to learn is how to finance such an expedition. Obviously, I do not have a lot of money right now, given that I am a college student.

I looked at http://geltfinancial.com/loanrehab.asp
Is this place reliable? What Options do I have?

PS: I would like this to be short-term investments (e.g., 1mo. or less–and yes, I can do it in less than a month).

Answer: There are several ways to accomplish what you are asking.

If your credit is decent, you can get a “construction loan” provided you got the deal at a low enough price. Typically, you will need to buy a house for less than 70% of the after repaired value.

If you buy it much more than that, you may not really end up making much money on the deal.

Go to your local real estate investment club and look for private investors called “hard money lenders”. They will loan you the money and can provide flexible terms (no payments till you sell). They are not cheap, but if you bought the house right, you will be fine.

Hope that helps.

Remember, budget on the high side for rehabs for both money and time…you never know what you are going to find.

Islamic Banking & Finance / Shariah Investments – WealthCity

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