BiggerPockets

So, I found a great house that I was planning on wholesaling. However, my girlfriend ended up falling in love with it.
The house needs about 20-25k, in mostly cosmetic work. There is a kitchen addition that settled and needs to be jacked up (its on posts not on cinderblocks, so my contractor said at most it should be 2.5K, not including the drywall that will crack when moved). And the roof may need repair and or replaced (5k). Most other stuff is cosmetic. carpets/floors, windows have already been replaced etc. AC already installed too.

My question is how should we fund this. She will be a first time homebuyer, so we should be able to go conventional since everything in the house works. There may be some minor electrical problems and there is a side porch that needs to be torn off, but all the systems work.

I'm wondering how we should fund the project. I am not familiar with 203k loans, but am worried it will be cumbersome, esp since my handyman/contractor does not pull permits for alot of stuff.

And from what I understand right now getting a HELOC on a non-seasoned house is nearly impossible. We would rather not have a 20k escrow from a 203k that we don't use up right away, but would like access to the HELOC if need be for cabinets, etc.

Also, we wanted to get in for as little money out of pocket as possible for closing and downpayment.

FYI The price is 123k, arv 220-230, with 20k necessary on the high side.
My girlfriend has excellent credit 760, good secure job (Teacher) but has little to put up or out of pocket without wrapping it into the loan.

Can anyone give some ideas?

Thanks

Pics-
http://www.flickr.com/photos/30354978@N00/2760290762/in/set-72157606703253014/

That is a cute house. I can't offer much help on the financing, my wife and I bought our first house as a 103% loan and I understand they don't offer those much anymore.

Can I ask how you found such a great deal though?

you talked down 160 to 123. I'm impressed, clearly we are in a different market than when I bought and sold my first house. The asking price for that house was 124, I paid 126,500.... LOL

After I sold it, I bought my new house for 310, the asking price was 315. (I offered 299 since thats what comps were going for, they countered and I buckled. The 299 comps both sold within a week of being listed though so I figured things were still moving up. This was about a year ago and I think my house today would sell for exactly what I paid.) I guess there's no harm in making lowball offers. worst case scenario they say no.

I would check with a local bank loan officer as they usually can do a construction loan and the long term financing.

Have you asked your bank about a straight FHA loan rather than the 203K If it doesn't need that much work done immediately. I've had quite a few buyers do 3% down deals this year on loans under $417,000. Also, I believe http://www.nehemiahcorp.org/ is still operating until October 1 so the seller can pay closing costs and the 3% downpayment.