opportunity you all wont believe!

73 Replies

Ok!!! After reading a bunch of inspiring stories on here, my excitement level is through the roof. So I want to throw this out there and see what you all think. Like I have mentioned or you can find in my profile, I am new to this, and I have little money. (There I said it! Please dont run! :) ) 

So I have found a triplex in my little town for sale... ive been following it on zillow for about a year watching the price drop every month. Well this month it dropped $10,000. Seriously. I am having my future partner/contractor come look at it with me next week. But I want you all to see my possibilities. The home is big and beautiful. It needs a heating system/boiler. Im hoping the contractor can give me a good estimate on costs. The houseis partially renovated , I am assuming they ran out of funds. Winters up here are harsh... really harsh... the insulation/ roof / and heating system has to bein good condition and will need updated. Here are m, "Ive never done this before, but I feel like I know things" -thoughts :) 

I will guess that I need a loan for $55,000.00 to get all three apartments up to date and livable nice condition, $25,000 for the house (unfricken real) and 30,000 for the boiler system and repairs. Repairs could be a lot less, im just throwing a safety number out there. I would lije to have a "just incase account with 2000 aside for emergency) The cost of living up here is very cheap (averages $600-700 for small single family homes in nice condition) This apartment will and has in the past rent out for - 

1st floor, 3 bedroom - $500

2nd floor, 2 bedroom - $400

3rd story, 1 bedroom - $300

Again, just thoughts, might be raised and adjusted depending on the funds available to fix up the place. This is about what the last owner charged while it was not in such nice conditions. So this is $1200 a month (lets pretend they all rent out immediately) Lets also say I have to pay 12% interest. With this income the house could be paid off in under 7 years. I am debating if living on the 1st floor for a few years would benefit, that would be an extra $700 a month I normally pay put toward getting this paid down FAST. 

Here is the catch. The bank will not give me a loan for this house, as it is not llivable. I am going to search for a private loan, or if you all have another idea??? I dont want to miss this opportunity!!! please tell me this is a great starting out property. I think it would be such a loow risk chance. I will attach more images!!!

I also live in a very small area. I would defiantly check similar properties rents comps because even in a very cheap area those rents seem very cheap. Perhaps 450x2 and 550x1 for the rents IMO. I would just hate to see your sell yourself short and cut your self out of some profit with your first property. Best of luck!! Keep us updated!

I  am trying to attach images. Please let me know if they appear

You could use a HML during the renovation process and get the house livable, then once the place is fixed and occupied and the property is seasoned, you can refi through a more traditional lender and use the money to pay back your HML and, if you have enough left over, use the rest of the money to buy your next property. Make sure you know you can refi before you enter this deal though or you may get yourself in alot of trouble down the line financially.

@skylar.. oh I have. It is actually this cheap. I live in a 3 bedroom house, full basement, 2 car large garage with automatic doors, very large newly fenced in yard in a great neighborhood- I pay $600.00 . My utilities are seperate. My friends pay about the same or less. Not a lot of rentals here tho, little competition. That could change in the future.

If it's only property condition keeping you from getting a loan, I would look further into the FHA 203k loan program. It will allow you to finance your rehab costs.

I haven't done one myself so it may not be an option, but definitely worthy of investigation.  It will definitely beat 12%.

I think this would only work for a primary residence though, so you would have to move into one of the units.

@george... I have def. Thought that too!!! But am worried about the refinance, I think after 1year I would be able to. After that I have hopes of doing that with 2 properties per year. This is just where I want to learn and gain experience with low risk.. before jumping in head first!!! :) that is def. My plan tho, im glad someone agrees. 

So what was that $4k sale in May?

how do I tag names? @wayne brooks, I can not figure it out.. here let me load the description

the first tit was listed it said a 3 bedroom- I need to get inside

@Danielle Hammond

Also keep in mind you might not be the only one who has been watching it for a year and every price drop will bring more potential buyers into action.  I would talk to your agent today to make sure no other offers are in yet.  Don't assume you have a week to get your contractor to come look at the renovations.

As a side note, if you are checking out a property and don't actually own it yet, it might be a bad idea to attach any identifying information for that property. Someone with questionable moral habits may see the opportunity and try to take advantage.  

@Danielle Hammond

You can qualify for an FHA loan with a score as low as 620. Are you sure it's that bad? There are also lots of ways you can get your score up fairly quickly (1-2 months) but that's a little beyond the scope of this discussion.

FHA loans have a lot of limitations... as to livable conditions... and duplex/ triplexes... I have tried them all lol :) @eddie... I know.. I thought about that!!! Eek

cant figure out how to remove.... ill just hope no one cares about traveling to the frozen tundra for such small profit.

I am set up to look inside tomorrow, not sure if my contractor can make it or not, if not I will take video for him ??? Now I am on the search for a HML , does anyone have amy ideas or suggestions? Sites I should post to? Should I post in here???

Nice community. Nice pictures.

But you need 10 more degrees of global warming to make it livable!

Love the UP

lol !! @richard... I feel ya!!! Somehow us yoopers make it work though and once you are used to it, you wouldnt have it any other way... well id take 10 degrees :) 

Originally posted by @Danielle Hammond :

lol !! @richard... I feel ya!!! Somehow us yoopers make it work though and once you are used to it, you wouldnt have it any other way... well id take 10 degrees :) 

I relocated from Southern California where 40 degrees is cold!

I survived minus 46 degrees wind chill factor. I went out and stood on my porch for 10 minutes without a coat. 

Good luck on acquiring your dream deal. 

@Danielle Hammond

Hi Daniel!

This looks like a great opportunity. However, I would really make sure to be able to secure a bank loan. My point is, you don't want to get caught not being able to refi and get stuck with a 12% private loan (that's what I understood). If you can, let's say, get a private loan, rehab the property over 6 months, refi with a bank and payback the private money. That would be a great scenario to me. Also, if it was mine, I would not live there since you lose that 700$ rent coming from somebody else. But, that's just me. You do as you wish :)

Best hopes for your project,

Kevin

@Danielle Hammond

To highlight a name, you just have to hit

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This sounds good

The house is $25,000  You have estimated $55,000 for renovation so the total cost will be $80,000.  So with your rent roll of $1,200 to $1,350 it looks like it will be an OK cash flow. It also sounds like once renovated rents can be higher?   As you say you just have to get the money to Fund it.  You have a contractor partner so how much cash can you each bring in?  

Are you buying this from a local Bank?  Can you sit down with them and see if they can or would offer you any kind of Personal loan on this?  

I think your idea of Moving in is a good one.  It certainly would help you get this whole thing together.  Get the heat going and move in. It is getting warm right now.   You say you could contribute $700.00  (your current rent) and that  would help.  Look at your credit card situation and see if there is anything you can do with that.  Can Home Depot give you a $10,000 line of credit toward your building materials?  What about Lowes line of credit  for your building supplies?  What can you borrow with Hard Money?  What can you and your partner do with credit cards?  How much sweat equity can you and your partner put in?

Good Luck.

@kevin... I wouldnt be losing the $700 a month because thats what I am currently paying someone else for rent... therefore I would be actually saving 200 a month, because if I rented out the apt. It would only be for 500. If that makes since.. it would only be temporary live-in tho, until renovations are finished.  

@barbara!! It is only 25000 for the house and about 30000 for reno... only 55000 Alll together. I have never even Thought about a home depot credit card!!! Thank you for that idea!!! My problem is my credit score... I have 10,000 in medical bills that are scattered to collection agencies... I put all of the money I make paying these of (they were 40,000) meaning I have very little savings. Once these are off my credit then a bank will be more than happy to work with me, until then they wont even talk to me!!! That is my reason for finding a private loan, then refinance in a year or two thru a bank. 

ON A POSITIVE NOTE!!! - I think everything iscoming together!!! I have met someone interested in borrowing, we will see. Wish me luck!!!  I will keep u guys posted!!! :) 

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