What route should I go?

7 Replies


I recently put a 2 Bed 1 bath half-duplex that's in a prime location under contract for $8,000(Pre-Foreclosure). It will need about $40,000 in repairs and the ARV is around $200,000. I am indecisive on the direction I should go. (The main issue is that I have reached out to several financial institutions & I cannot get financing to save my life) My options so far are.

1. Buy it cash and worry about repairs later (Home Improvement Loan) 


3. Fix & Flip

If anyone out there has any suggestions I would greatly appreciate them.



not much to think about buy it asap,if the numbers are that good.I would use a home equity loan to get it up and running then refinance What amount of income are you estimating?

I am highly considering going that route. It would rent for $1400-1500 or bring about $2000-$2500 in with Air Bnb. Thank you for your insight btw

Why is it so inexpensive?  Did you take over the owners' mortage, or...?

The payoff was quite low so I was able to make a cash offer for a really low price. 

First of all, congratulation! It sounds like you got a great deal. I think your choice should depend primarily on two things:
1)What do the numbers look like?
You have estimated rental numbers, what would a renovation for rental cost you? What would your ROI be for that property? What can you sell it for if you flip it? How much would that renovation cost?

2)What are your investment goals?
If you are trying to build a rental portfolio, then you may be willing to accept a smaller ROI in order to add some passive income.

Whatever you decide, I STRONGLY recommend deciding on a goal for the property BEFORE beginning renovations. Renovating a property for rental is a VERY different process than renovating for sale.

Either way, good luck!

Buy it. Cash. Now! Figure out the rest later.

Echo the other points above and figure out what your goals are as far as keeping it for a rental, or selling it quickly.  Only you can answer that.

As far as the rest, with minimal holding costs (no mortgage!), you have the luxury of taking your time in the rehab.  Here are a couple options, in no particular order:

1. take out a personal/home equity loan.  Usually around 10% interest, depending on your credit.

2. use a credit card.  higher interest, and harder to pay contractors.

3. Get a Home Depot/Lowes card and use them for as much as possible, taking advantage of the no interest financing for 6-24 months.  They'll do roofs, flooring, HVAC, appliances, cabinets, windows...etc.  Credit score and income will dictate the limit on the card.

4. Refi immediately.  They may be more apt to lend you money if you already own the property, but then you'd have to pay closing costs, which may be more than the financing costs associated with a credit card or personal loan.  

5. stretch the repairs out over a period of time and DIY, paying cash along the way.  

6. any combination of the above.

Again, only you can determine which is the best option for you, depending on your situation.

Thank you for all your great advice. I have decided to purchase it with my own cash and eventually cash-out refi it! We are closing later this week! 

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