I bought a house and started remodeling with my own money and ran

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Hi all I purchased a home from a tax sale and started the remodeling using my own money but ran out. It still needs about 30,000 to finish. No holding cost on the house besides taxes. I’ve been told to sale as is and call it a day. This is my first deal. Any ideas for me. I’m broke no money and most hard money lenders wants a % down. Any ideas. I think I will be crushed if I didn’t finish the deal.

@Sophie Scott a few things you can look into:

1. Check w/ a local bank about refinancing the deal. Hopefully you purchased with an ARV (After repair value) in it that you'd make money. Show them the work you've done, ask for a construction loan.

2. Bring on a partner. Again, hopefully there is enough meat on the bone to bring someone on and provide a return. Not an ideal situation but it gets you to your goal. 

3. Is it livable now or can be made livable without the additional $30K in work? If so live in it or rent it out until you can save the money to finish it.

4. Worst case scenario is you sell it as is. At least in my opinion.

Originally posted by @Sophie Scott :

Hi all I purchased a home from a tax sale and started the remodeling using my own money but ran out. It still needs about 30,000 to finish. No holding cost on the house besides taxes. I’ve been told to sale as is and call it a day. This is my first deal. Any ideas for me. I’m broke no money and most hard money lenders wants a % down. Any ideas. I think I will be crushed if I didn’t finish the deal.

Sophie

Hard money lenders want a percentage down on a purchase, but you already own it and have your own cash into the deal, so a refinance is in order. Sounds like you need to reevaluate the numbers; particularly the final ARV, keep your all in cost below 70% of the real ARV (whatever that will be) and adjust your budget to keep the renovations where they should be. Once the numbers make sense, lay it all out and execute the plan. As the property is stabilized (all renovations complete and fully rented), you can determine if you want to keep the property or not. If you want to keep it, then get a DSCR loan with a 30 year amortization. If you can help it at all, don't sell until the construction is complete.

Don't panic.  You've got this.

Stephanie

 

If you have decent credit, look into 0% interest credit cards preferably 12 months, and use that to help with your rehab cost. Once rented, look into cash-out refinance to pay off credit cards or any debt. Focusing on paying highest interest to lowest (in that order).