Should I buy it? Deal break down. What is a construction loan
Dyslexia Disclaimer. look past the typos.
I have a chance to buy a 4 plex! I am bidding on it at auction. Up to $34,000. The Bank's reserve is 16k. It is class C-/D+. We all ready own similar properties and we have systems to manage the demands which comes with this tenant pool.
The problem? It is a 24 hour closing. Aka no appraisal. We really need to get our cash out after rehabbing it. And this area is the wild west of appraisal values. I will really like some feed back of any one who wants to put eyes on. The address is 913 Cotton Ave SW, Birmingham AL . I have a though of what the ARV is. But I really would like some one to give their opinion with out me casting a shadow them.
Numbers
Asking up to 34,000
Rehab $32,000
Evictions $ up to %1,200
Rent, $500/mo per unit. (24,000/yr)
We will be buying in cash. We will use a construction loan for the rehab. We will exit via a 30 year fixed.
Some other questions. I never have got a construction loan. The last rehab we did was out of pocket ($12,000) and we recaptured that on the refi. So how do construction loans work?
Oh and I have to buy in 36 hours!
PS
The property is occupied, The tenants refused to pay do to the condition of the property. They are on new leases with 9 months to go. The current property manager just took up the building 3 months ago. The tenants are now on repayment plans. I am ready to evict if they don't/can't pay rent. This county as a 3 week turn around form the date filed.