Rookie Mistake...
Hubby and I acquired a property with creative financing. We didn't know the term then, we just thought we were ingenious for coming up with the idea. We got in on a decent deal, but failed to have an exit strategy. The property has great rental potential. Each time we are there, we get multiple inquiries about how to rent it. Nonetheless, it needs quite a bit of work to get it into better standards.
The major needs are central heat/air, new windows, new doors, updated electric/plumbing, and a new roof. We are putting in a lot of sweat equity to replace walls, floors, painting, etc. The neighborhood is wonderful. 98% of the current residents own their homes and have been there for generations. The lot next to our rental is owned by our neighbor and they take excellent care of it. We have met just about all the residents and they are awesome, look out for one another, and are happy we are trying to spruce up the neighborhood.
The issue with flipping instead of renting the property is the surrounding neighborhoods don't have the best reputations. So unless we get an investor to buy it, it's ours for the long haul.
The repairs are more than what we rookies anticipated and we are working to find a way to accomplish completion of this project.
I have complete confidence we will get it done. We just haven't figured out the manner in which to do it that doesn't tie up his credit line. We are transitioning out of the military within the next 4 months and want to purchase a primary residence with a VA loan.
We thought we did or due diligence and we jumped in with emotion instead of numbers and knowledge. We have learned a huge lesson and feel better about making future decisions.
It truly takes ONE TIME to learn what NOT to do.... The biggest thing I am taking away is leave emotions at home. Let the numbers make the sense or we won't make dollars.
Sorry for your predicament chalk it up to a learning experience but if the numbers work you can still come out ok. Don't compound the problem by stretching the renovations out. Remember also time is money. Consider deciding now jobs that are better contracted out then done yourself and work on and stick to a timeline. If you are renting vs flipping this is another place where you can save time by showing sooner. If you have money coming in sooner that credit line can get paid down. My experience is if you want a roofing guy call now.. most difficult contractor type ever.
Mistakes happen to the best of us but the best of us learn how to turn it around. Lemons to lemonade. I would stop what your doing and come up with a plan before you go any further. If you are going to rent you may not need to do all of the work you are proposing. Newer investors often over do the rehab on flippers and rentals.
Thanks for your input guys. We definitely earned a degree in one transaction. We have scaled back on plans in a huge way. We just didn't want to compromise our standard of quality living. After working and re- working our plans, I believe we can finally begin to move forward. I have no regrets because we are a lot smarter after this process. The tools and forums on BP has taught us plenty on properly analyzing properties and rehabs. We are holding our heads high. We had to start somewhere and know we can turn this around for the better.