How can I make this deal happen? possible first purchase
Thank you in advance for the help/advice.
How can I make this deal happen? My dad passed away last year. My mother (71yrs) does not want to live in the house anymore she owes $50k and is willing to sell it to me for $65k. The house needs HVAC repairs and a possible foundation leak, this is a 90sq foot home with 2 bedrooms and 1 bath.
I currently have about 10k in the bank but I keep hearing about buying properties without using your money?? The houses in the area are selling for $130k and renting for $900 a month.
I had an inspection done on the house and an appraisal. The inspection company gave me a punch list of the items to fix and the appraisal the comps around the area.
My question is should I just get a loan from the bank to cover the 65K and make repairs while my mother is living in it? or should I get a loan asking for the 65k + repairs?
Thank you again for the advice.
#4 All Forums Contributor
- Plymouth, MI
Questions:
1 - What is the monthly payment your mother is paying now?
2 - What are her plans if/after she sells this house?
3 - Do you have prices attached to each of the items on that repair/rehab list yet?
Thank you for answering.
1. $873 monthly, their interest is 7%
2. She is moving to an income Social Security-based apartment with everything included, her rent there will be $605 monthly
3. Yes, HVAC repairs are $8500+-, and possible foundation issue $10K+- (image attached)
Quote from @Mario Forno:
If it appraises, I would recommend a loan that includes improvement costs. I don't know if it would work. Mortgage, taxes, and insurance probably run $600+. Another $100 a month for maintenance and set aside another $200 (minimum) for capex and vacancy. There's no meat on the bone. I'm not saying it couldn't work; I'm saying you need to seriously analyze it and see if it will.
Here's a guide that describes what good cash flow looks like and how to analyze a property.
https://www.biggerpockets.com/...
Hey Mario, I would get an FHA 203k if possible. It will cover up to 35k in repairs I believe