Hello BiggerPockets community, first I haven't been here in awhile but I ran into a real estate stump . I recently seen a single family two bedroom house for sell he brought it for maybe 90k and I wanna obtain the property for my first rental but also he didn't really finish the inside up so it's still kinda gutted. My question here is how would I approach him on the idea of owner finance and is it also possible to budget in rehab costs as well.
Walk away from 2 bed homes. Not enough rent money, look for 3+ beds.
If and only if the property cashflows, then approach the owner directly and tell them what you want to do.
It will either fly or not. Best to determine that sooner rather than later.
James C I already know I'll have to put money into it because the current owner gutted it and never finished it I've done a walk though, only thing that's left is the hall way and kitchen. It doesn't seem like it's worth it but financially owner finance would be the only way I can obtain a property right now.
If it has already been gutted, is there the potential to find space for a 3rd bedroom. Instant value add if the community will support it. For example, if you were planning to rent it to college students who don't necessarily want a common eating area, you could turn the dining room into a 3rd bedroom. Just a thought.
@Dan Williamson that was a great idea and I looked into doing that but this location is kinda out of the area of off campus housing . There's always an certain area in town that they rent from , but the next idea I had was changing the basement into additional space but how would I pay for a renovation such as that and how would I be able to label it as a true 3-4 bed room house ?
All you can do is run the numbers to see what works. If you can't get it at a price and terms that make sense, then move on. There is a reason the owner ain't completing it... and you need to find out why, that will give you your motivation.
@Ray Agosto , I would look into the permit costs to add bedrooms to the basement as well as the code requirements (i.e. having closets, recessed windows, alternate exits, etc). You may have to chat with a contractor in your area about it. That could turn into a bigger project then you might expect so make sure the numbers work even with a variance for unexpected costs.
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