By Candis Meredith
If you’ve been watching our show or reading our blog, you already know that I absolutely had to have Love House the minute I saw it on the MLS. You also know that I didn’t know how I was going to get the money to buy the house that Andy and I would eventually get married in but that I was determined to make my dream (of owning the house—I didn’t have any idea we’d fall in love and get married yet) come true.
At that point, even though I was sweating bullets trying to figure out how I was going to fund Love House, I knew that I had the means to somehow make it happen for a couple of reasons. First, I thought, “Where there’s a will, there’s a way,” but more than that, I already had experience getting loans from investors for restoration jobs like these. Because I had experience, I knew that there were a few different ways to buy a distressed house and restore it without any real money of my own.
As our show has gotten more airtime, and Andy and I have talked to more hopeful home renovators, I’ve realized that a lot of people don’t know just how accessible funding can be. So, if you have your own Love House that you’re dreaming of, here are a few tips to help you get it and fund your renovations.
Don’t Be Scared of Hard Money Loans and Private Lenders
When I bought Love House, I’d just finished another renovation project, Center Street Manor (CSM), and I’d gotten a private investor to agree to a high-interest loan on it. It was a lot like taking out a hard money loan in that I was going to have to pay it off pretty quickly if I didn’t want to get soaked with the interest, but that kind of loan is actually really helpful for people who want to restore old homes, because approval for your loan generally won’t be based on your credit. Instead, it’ll be based on how much your property is worth and how much it’ll be worth when you’re done with your work.
You Can Use Your Equity on Other Properties
So now you know how I got the money for CSM, but how did I get the money for Love House? Believe it or not, I actually used CSM to pay for Love House. Because I’d improved CSM’s value so much, it had a lot more equity by the time I needed to buy Love House. Basically, I used my equity line of credit on CSM to get the $75,000 in cash that I needed for Love House.
Find an Interested Buyer
Another great way to do the restorations you love when you don’t have any of your own investment money is to find a buyer for the property. Whether they want to invest in the property and sell it when you’re done restoring it or whether they want to live there themselves, you can approach a private investor to pay for the property, the restoration expenses, and your labor. Then you’ll make some money while you create a beautifully renovated home. Everyone wins!
When you don’t have a lot of your own cash to invest in a quality renovation, you need to be resourceful, but it really isn’t that difficult. Investors and lenders want to loan you money—you just have to show them that you have a property worth investing in, and you’ll be on your way.