Hey all! If you could please lend any advice/experiences/lessons learned about moving into a SFH fixer upper w/ conventional financing + renovation loan, add sweat equity, refinance in a few years and convert to full rental, I'd truly appreciate it.
This is my strategy to begin my REI career here in Houston and considering Oak Forest area, so any locals with advice on that would be sincerely appreciated as well.
Thank you so much for your time!
I didn't have a renovation loan, but my home was sort of a fixer-upper. Really, it just needed updates. If you have the ability and *desire* to do projects, do them! But also know when to hire out some work. Also, go with classic designs and colors that won't go out of style.
If you're just doing parts of the house at a time, perhaps you could house hack. Rent out an extra bedroom in your home using a month-to-month lease so that it's flexible. That cash-flow can go right to your mortgage principle or renovation costs!
If you plan to use this method of buying fixer-uppers and later turning them into full-time rentals to grow your portfolio, then you might want to be sure you are able to fix up the place within one year. After one year of living in your home, most mortgages have no problem with you moving out and turning it into a rental. Then, you have the benefit of lower interest rates that come with primary-residence loans/mortgages. And you repeat the cycle. This would get you one house per year until some of your first houses get lots of equity and you can use the equity to invest.
Or, you just keep living in the first house, get lots of equity, and invest using that. You have options.
Did you have any specific questions?
@Austin Nicoson you could try to get a FHA loan. Low down payment so you can push that money towards fixing up the place. When you ready to move the next one. You can refi this one for with a new loan with lower interest.
@Nicole A. Thank you so much Nicole, that’s all helpful info :)
No specific questions really, just seeing if there’s anything I hadn’t considered with this strategy or just general advice, things I should be particularly cautious of, etc.
But it’s great to hear to hear of your experience, I really appreciate it!
Thanks @Dan Tran !