Family member is selling me their home but i didn't want to go the conventional route of getting a mortgage to buy the place because it wouldn't appraise anyways due to the condition of the property which isn't bad but not great. Also his mortgage is not assumable. Would it make sense to get a hard money loan to buy the place fix it up and than refinance it?
It sounds to me like you're buying the house for more than it's worth? I base that on your statement of "it wouldn't appraise anyways due to the condition"...
And then you're going to put more money into it to fix it?
Most profits are made on the buying side and you're already starting off on the wrong foot there.
The only way I can see this working is if you refinance it, hold it and rent it out, but only if there is significant appreciation for this type of house in this market. You might get it to cash flow, but it sounds pretty shaky to me.
To answer your question: yes, that is one possible option.
The question I pose to you is: why?
it needs to be repaired thats why i won't go conventional
Buy it sub2, assuming you have the funds...fix it up, then refinance or sell. You'll need 20-40% of your own money most likely, with a HML, if you tried to finance the purchase and rehab.
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