Real Estate Agent · Clinton, MD · Member since 2014 · 45 posts · 8 votes
A friend and I are looking to jump into real estate investing, and we've come across a property that we are interested in.
The purchase price is $93K
Rehab $40k
ARV $215k
The problem is that we need $40k to close on the property. What could we do to obtain funding to cover the closing costs? I'm sure there is a simple answer to this question, but again I'm new. Any feedback would be greatly appreciated.
Investor, Entrepreneur, Educator · Springfield, MO · Member since 2009 · 21k+ posts · 12k+ votes
12y
Generally closing costs are not financed, especially with a rehab. Rehabs won't go FHA if they have issues to repair. An exception might be an FHA 203K. You can ask the seller to pay some costs or raise the offer and have the seller pay costs, up to 3%, but the property has to appraise at a higher value too. That's the only way to finance costs in the loan. Before you start making offers, go to your lender and get pre-qualified and see what the costs will be and what pre-paid items there will be for you to pay. Good luck :)
Involved In Real Estate · Hyattsville , MD · Member since 2011 · 298 posts · 256 votes
12y
If this is a rehab and your first one then you need to find some way to come up with the cash. Usually from family, friends, savings etc. There is normally no way to finance the cash. Also keep in mind that you will have to have the funds to start the rehab before a draw is given to you.
Do you already have the property under contract? My telephone number should be at the bottom of my signature. If interested give me a call- if its a valid deal I would consider a JV with you.