House Hacking & Reno Budget
My wife and I are looking to buy a home as our permanent residence with the hopes of converting it into a rental in 1-2 years. We would live 3 blocks from the university so college students would definitely be our market. The home already has 5 beds/2 baths and an unfinished basement that could be converted into more bedrooms. The home is a foreclosure and we are doing a 203K loan (3.5% down) with plans of refinancing in a year. The listing was $114,500, it has been on the market a month with no interest. We offered $80,000 and expect to eventually land in the low $90s. Using the 70% Rule it says that we should only be willing to spend around $83,000 for the property (Strike Price = (.7x$175,000) - $40,000 = $82,500.) With this being our primary residence and with all the other factors mentioned above, would you say it is ok to pay the extra $10,000 and not complete all of the finishes we would like to put in the home since some of them would only be cosmetic. The home needs brought into the 21st century, but has no major issues (new roof, new windows, good furnace, A/C, water heater, etc.). Any advice would be great.