My grandfather has a 3bd 2ba 2200sqft house in Mineola, Tx. He plans to leave it to my Mother and is wanting to just give it to her now.
He owes back taxes on the property and it's in need of some serious repairs. My mother also owes taxes but has no assets to put a lean on.
That being said, my plan is to buy the house from my grandfather for the cost of renovation. He just gives the money to me that he receives from the bank for the sale.
I plan to use the money to convert the house into a tri-plex. The size and way the house is built, I can easily turn it into 3 one bedroom units that will rent for 800pm all bills paid. Mother stays in one unit and I rent the other 2 units out.
I estimate Reno at about 60k and ARV 125k. The 1600 more than covers expenses and cash flows. Mom's happy and I'm happy.
Should I go conventional mortgage route or look into HML for a BRRRR like strategy? Or am I missing something altogether and need to go another route?
looking for any all thoughts, help, info etc. I can't screw this up. I want to get into full time real estate investing and I need this to work right to jump start my investing
Hey Chris, this is what I call opportunistic thinking. Many people would see this as a hassle but you are seeing the positive and how to make it work not only for you but also for your family. If the house does need a lot of work HML is probably your only bet since conventional loans might not be as willing to invest in a fixer upper. I would try to apply though to compare advantages and disadvantages.
One thing I would suggest is to look at the zoning laws and permits needed to do this transformation. Many places in the US don’t even allow multi family where there is a single family.
Best of luck to you!
Thanks for the info. I will double check how the zoning applies and see about changing if needed.