BiggerPockets

Hard money or a private lender. You'll need to know what the place will be worth once its fixed up and what it will rent for. You'll also need to be sure you can get out of the hand money loan.

You'll be all in around $33K. HMLs will typically go 65% of the ARV (after repaired value). So, you need it to be worth $50K fixed up. Does that work?

If so, you'd want to hang onto some of that cash. So maybe you try to borrow $30K. You'll have closing costs, points, and need to be able to make monthly payments.

Then, you'll need to be able to refinance into a loan for about $35K. That will cover paying off the hard money, closing costs on the new loan, and your pre-paids. That makes your payment about $230 plus taxes and insurance. Do you have a steady job and enough income to cover that payment along with your other debt payments?

hmmm, a 110k arv? how did u come up with that?

also, ur chances of getting the loan refinanced are NILL!

with no job, no credit, no income, no bank will give you a cash-out refi.

i suggest wholesaling this.

I really hate wholesaling just because I cannot find a buyer. I tried doing craiglist, backpage, ebay and facebook. I get the same answers all the time. They say "give me more info and I will distribute it to my investors or I was just wondering how your doing with your buyer's list"

I would really want to keep this prop and try to rent it out. What are my other options?? Plus, what if I can convince the bank that the rent can pay for itself. And also, I have 12k cash... Idk if that will matter.

Well first, zillow and realestateabc.com gave me an estimate of 110k ARV. The realtor gave me sold comparables of the property for 100k.

I am getting my inspection done and hopefully a multiple contractor's bid at the same time. The realtor said it would cost about 25k-30k estimate for rehabbing... Okay so at max probably I would borrow maybe less than 45k from a HML.

The only thing that bothers me is refinancing. If I can't get a refinance in this. I probably should not do this...

Jon, what are my options here?? What Can I do, If I can't do this great deal?? I have about 10-12k cash that I can use... But I don't know what to do If I can't refinance. Also, mainly considering my no credit and probably a part time job. Help please.

I congratulate you on your persistence in trying to get this deal done. Honestly, I don't have a miracle up my sleeve for you. With no job and no credit, you're just not going to get a loan on your own. Even though you think it will make money the bank thinks they will end up taking it when you don't make the payments.

Do you have a family member with good credit, good income and an acceptable DTI (debt to income ratio, total monthly debt payments divided by total gross monthly income) who would be willing to cosign?

Where do you live? Could you live in this house while you fix it up? Is it livable?

When I hear of an $8K house that needs $25K in work, I think its nearly a scraper. Keep in mind that there are two classes of contractors, IMHO. There are contractors who do work for retail customer. Homeowners with plenty of cash who want a really good job and want it quick. Then there are guys who will need more careful instructions and supervision but who will do a very good job for a much lower price. You're looking for the second kind. I spent almost $50K on a kitchen in my house a few years ago, before I was serious about this business. It came out nice, and was fairly quick, but I realize now I could have done that job for $20K, maybe less. They wouldn't have been the same cabinets, but would have been just as good.

Have a look at my first rehab. That was about $16K. Paint and carpet throughout, new furnace, complete gut in the kitchen, walls moved, new water heater, and quite a bit of plumbing and electric. Now, I did much of the grunt work myself, but all the electric, plumbing and furnace was done by licensed contractors and the job was fully permitted and inspected.

If it would really sell for $100K, or even something close, think about flipping it. I know you want to keep it, but, in the words of Austin Powers "I want a solid gold toilet, but its just not in the cards now is it baby". If you can find someone willing to partner with you on the money, you stand to make a very nice profit.

Yeah. I'll have an appraisal. My father has credit, but he is working on refinancing our house. So I don't want to put more on his shoulder.

I live in CT, and I am investing in Indianapolis. A property for 8k is a pretty good deal. I'll look into flipping this house. But from what I studied. This area code has more renters than home buyers. But I can probably sell it for as cheap as 80k with a still pretty good profit.

As for rehab, It needs new kitchen, 1-2 windows, carpet, new paint and bathroom.

I'll keep posting to update. If I go with that flipping... thers a risk of paying taxes and the monthly mortgage if I dont sell as fast. DOM is about 3-6mos. Thers a risk there. But I can also try to find a buyer to wholesale this. I'm aiming up high though.
Thanks again guys. You guys are so helpful.!!!

It looks to me that you jumped into the pool and then check how deep the water is. That's OK, any mistake you make, you won't repeat if you smart and you learn from it. So, the order of things (For the future) is first you make a plan (It seems like you have one already, which is good) then you look at ways to execute it. The next step would be to see how credit-worthy you are. What is your DTI (Debt to income) ratio, your FICO score, your income history, etc. Then you get pre-approved or you find HM lender and see if they would approve you, or a private investor (It can be a friend, your father, your grandma, etc). After you do all that, you star looking for a property you like, can afford and fits your financial backing. Then you research the neighbourhood. What type of neighborhood is it? How much non-REOs are selling for? What it the trend? What it the rental market and who are the typical renters? Etc. Now, assuming that everything is already in place, (Your pre-approval, or financial backer , etc) you can start buying.

Good luck

Arlu,

What side of town is your property located? You don't have to give me an address but if you give me an area I can tell you about what it will sell for. I am a real estate broker but don't list/sell property locally but I'll give you my humble opinion.

If it is really 10K and would sell in 30 days at 80K I'll bring you a cash partner to get the rehab done and get it listed.

Stacy

Arlu seems to be too busy to continue his thread. Maybe he is rehabbing that 8K home......... Rich

I really hope, for Arlu's sake, that he didn't close. Get someone in Indy to help this kid out before it ends up at a tax sale.