Okay, we're looking for some help. We have an accepted cash offer on a foreclosed 4-plex. We need to generate some funds for the purchase but from what I can see most of the lending is for fix and flip situations. This would be a BRRR property for us. We close Friday on another 4-plex through a 1031-exchange. We are using a portion of the 1031 money towards this property and do have savings to cover 50% easily of the foreclosed 4-plex. Both of them happening at the same time is leaving us a bit cash poor. My ideas so far are a home equity loan and a personal loan, but I don't know how long those take to close and we have 3 weeks to figure it out. The purchase price of the 4-plex is $116,500 and once repaired its value will be between $300,000-$350,000 (with $50,000-$75,000 in needed repairs for my high standards). Please if anyone has advice let me know.
When you made the cash offer, how did you intend to pay for it? I'm guessing you had a plan at that time? If so, what happened to the money?
Bring on a partner in the deal.
We had 2 offers accepted. One for a 4-plex in excellent condition that's fully rented and then this one. That one is $70,000 down on a purchase price of $315,000 with 1031 funds. We are set to close on it this Friday and we just got the accepted offer for this BRRR property yesterday. The problem is them happening at once. We thought we had no chance at the foreclosed house or we never would have bought the other property. My options are to generate $50,000 cash or to back out of the full market purchase. I did find out that personal loans can be approved in 1-2 days so that's what I'll try first. Are there hard money loans for fixing and holding or just flipping?
We were able to get a home equity loan in 2-3 weeks but it did require an appraisal of our home so you would be cutting it close in terms of time. Talk to your bank first to see how quick they could get you the money. Let the seller know that you have half of the cash now and will have the remainder of the cash (by doing a home equity loan) in a couple of weeks. I would first ask them if they can wait for your home equity loan funds to come through, if they wont and insist on having the money now- you could get a hard money or personal loan quick but the terms are usually not as good.
Thanks Jessie, I'll call the bank about that. I'm currently dumping my Ebay inventory so that'd mean I'd have to clean my house...