I understand I have to pay a down payment of 20% and closing costs when I buy the house, but assuming it takes two months to renovate the house there would be holding costs as well. As someone who has never done it before can someone with experience help me understand what I should be prepared for financially if I wanted to get into the business? In other words, how much would I need to save up if I wanted to have 2 months of expenses as well as the down payment and closing costs at the time of closing.
Hey @John LaVecchia , you dont need 20% down. You can look into an FHA loan for as low as 3.5% down, and also Freddie Mac HomePossible Loans for as low as 5% down I believe. However, in financing a multifamily, I believe you need to have a certain amount of reserves built up as well. I just bought a 3 family property in Charlotte and had to have 6 months of reserves built up for them to give me the clear to close. However, they will let you use pretty much any investment account as reserves, so if you have money in a 401k or something like that, they can consider that as reserves.
Feel free to PM me. I do almost 100% of my own remodel work, including plumbing, electrical, etc. Id be glad to offer you any advice.
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