A Unique Funding Alternative for Rehabber
Most rehab contractors or “flippers” use a lender of some sorts, either a bank, a hard money lender, or an investor from whom they borrow a portion of the funds necessary to purchase the home. This, of course, is done in exchange for a promissory note or lien and often includes a high rate of interest and some serious points up-front. Some hard-money lenders in this space are even demanding a share in the profits at the end of the rehab.
The Turning Point™ Rehab Option approach is different.
The Rehab Option model is fairly straight forward. The Fund backing the Saratoga Group buys the home. The rehabber puts up roughly 5% as an upfront option payment and security deposit. The home is rehabbed and marketed and once a buyer is in place, the Fund directly sells the home to the new buyer, and the rehabber takes his profits as a remodeling fee.