I am looking at a triplex that needs some work and is likely to be valued much higher than is currently for sale. My end goal is to own the property as a buy and hold and perhaps live in one of the units. It's selling for $165K and will probably need $30K in renovations. Rents for the units vary from $1100 to $1300 or more per month.
I am considering a hard money loan to pick up the property and rehab, then refinance with a traditional loan taking advantage of the spread in the ARV.
Does this sound logical? Is the bank likely to refinance the property without much hassle if there is enough additional value? Should I just look to do a 203K loan?
This will be my first deal and I don't have a ton of cash to go into this. Just trying to make the best decisions and not get stuck.
Yes, that's a workable strategy. You may need to hold it for six months to a year to refi using a new appraisal. Discuss that with your refi lender ahead of time so you know what to expect.
Owner occupied will kill your loan for most hard money lenders.
Yep, missed that. Most HMLs forbid you occupying the property. That makes it a highly-regulated residential loan. Simply don't move in and you'll be fine.
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