I have a current project that I am actively working on and seeking advice from the BP community. My twin brother and I co-own a multi-family property free and clear. We were planning on utilizing an FHA 203k loan to bring the property into rentable shape. However, the contractor quotes we got plus the mortgage insurance we would be paying is too much risk to take as young investors.
However, we think that if we can field a private investment from an individual (hopefully a contractor), we could cut out the upcharge that our contractor has been quoting and avoid the PMI payment altogether.
Ideally, I would love share the cash flows with the investing member in equal share of our contribution to the project. Each unit would easily fetch $1,000/mo and most likely around $1,200.
About the property:
4 units (separate entrances)
1,500-1700 square feet/unit
2 2-bedroom units
2 3-bedroom units
Near north side of Indianapolis
Advice, contractors, potential interested deal-making parties are all welcome to the conversation.
Evan....Some ideas on the numbers? The rehab budget, timeline, ARV, current value?
Sorry -- clicked submit before I was all done.
Rehab budget: $35k-$40k per unit ($150k-$160k
Timeline: 100 day project per other contractor quotes
ARV: About $400k at time of completion.
Current Value: Most likely around $150,000
We had also thought about re-parceling the property to flip as townhomes, but getting the property into retail shape would involve acquisition of more land for parking and other costs that may not be feasible. There are a lot of moving parts to a condo-flip project that leasing the units doesn't have
Does that help, @Rusty Scott ?
Thanks, yes it does....so you are looking for roughly 150k, for roughly 50% ownership....and projecting 4k to 4800 gross monthly income...net income also split 50/50?
Is that an accurate summation?
Is this old northside? Herron Morton?
Sent you a PM
If you stick with traditional financing you could also look at a refi Homestyle loan which should be cheaper cost-wise and less cumbersome requirement-wise than an FHA 203K. Since you own the property free and clear there may be other options for asset-based loans that you could use but I'm not knowledgeable about those.
Will you send me the address? Sounds interesting. Thanks!
Hey! I just tried to send you a note, but I'm not sure it worked. I might be interested in the property depending on the location. Could you send the address? Thanks!
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