I am in need of some mentoring and coaching to do this. My plan as of now is to secure 50k through a private lender and do some renovations and get a tenant in there. Then go to a bank to get a mortgage on it to pay back the lender and also pay 60k to my aunt. The home as it sits is valued at 92k on the low end and 145k on the high end, I would rent it out for at least 1k per month as currently it is rented for 700/ month with my grandfathers stuff taking up one room.
If anyone could help me make a plan and/or put get it moving I would greatly appreciate it.
Rental Property Investor · Chubbuck, ID · Member since 2018 · 532 posts · 466 votes
7y
You are going to need the home value to be $150 after your repairs to make work. If that is the case this is just a brrr property. Make sure you buy the house from your aunt first. You don’t want to have a loan with a private investor fix it up and her say never mind.
Im considering doing a master lease option with my aunt or doing hard money for 110k putting 60k to my aunt and 50k for renovations and then doing a mortgage to pay off hard money.
Specialist · Chicago · Member since 2018 · 126 posts · 51 votes
7y
I think you should make it legally yours before you get a loan for repairs. I mean have it in writing that you are purchasing the home for x amount of dollars.
Figure out how much skin in the game you will have so you can tell the bank your down payment. On 110 k I think you should have around 22 k down.
I am interested in how you will approach a bank.
I mean saying my aunt is selling me this house worth 145 k for 60 and then I want 50 more to rehab it sounds a little fishy to me. I mean it has happened. But your Aunt can't just gift you 85 k of a home. Taxes will come into play.