Turnkey Questions

7 Replies

I came across a local company that has a listing as follows.  It is a new listing and hasn't been on the market long.

3 BR / 2 BA

Purchase Price: $75,500
Estimated Repairs: $12,000
ARV $125,000
Local Rents in area: $1,400

This listing is in a nicer area and looks like a deal.  Obviously I would have to do my due diligence with these numbers to verify.

Do these companies do the repairs themselves?  Is there anything that I should look out for with companies like this?

If the company selling the home has not made the repairs before you purchase it then I dont know if you would classify them as TK.   At the listed price I would assume they dont even own the home.  You would have to purchase the home all cash as if the home does have $12k in repairs needed it most likely would not pass the appraisal inspection.  

God luck, do your due diligence.

Curt Davis, Real Estate Agent in TN (#00321765)
605-310-7929
Originally posted by @Rob Randle:

This listing is in a nicer area and looks like a deal.  Obviously I would have to do my due diligence with these numbers to verify.

Do these companies do the repairs themselves?  Is there anything that I should look out for with companies like this?

If the deal is so good, why are they passing on it?

Originally posted by @William Hochstedler :

Is this a MLS listing?

It looks a lot like how wholesale deals are presented.

It is a wholesale deal, I just spoke with the guy and he is fixing it up currently and thinking of flipping it himself. He said he that he has hard money guys and they lend 65% of ARV.

Originally posted by @James DeRoest :
Originally posted by @Rob Randle:

This listing is in a nicer area and looks like a deal.  Obviously I would have to do my due diligence with these numbers to verify.

Do these companies do the repairs themselves?  Is there anything that I should look out for with companies like this?

If the deal is so good, why are they passing on it?

 I don't know, I will be driving by the area tomorrow.  Guy that I spoke to said he had the deal for two months and had low-ball offers and mentioned he is just going flip himself if he doesn't get acceptable offer.

When using hard money to buy and rehab how soon can I refinance to the new ARV?

Do I have to still have to wait a certain time period or can I refinance my cash-out right away once the rehab is complete?

When I spoke with a mortgage lender they mentioned a guideline of having to wait at least 12 months before a refinance.  However, that was taking in consideration that the original loan was conventional 80/20.

You won't be able to get 80% LTV unless you occupy it. You should assume 70-75% LTV for an investment property.

I'm seeing rate and term refi's after 6 months and cash-outs after 9 months. If you use any borrowed money to rehab it, it will be a cash out. If you use the money only for the purchase and other funds to improve it, you might be able to go rate and term, but the refi would only pay off the HML, your rehab costs would be left in the property.

So right now we're waiting 9 months to pull everything back out.  They shortened the 12 month requirement over a year ago, so talk to other lenders.

Wm

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