Hello, I would like to purchase an investment property (distressed,pre-foreclosure) in Brooklyn, fully renovate to make it modern/contemporary including exterior and Airbnb the rooms out. I would also like to make a bottom unit for myself. I would only be in Brooklyn for half of the year and maybe Airbnb that one out too. Could I make this a reality with little money down, Including funding the renovations? I don't know if this is possible but I'm not surprised by anything in real estate investing anymore.
P.S I was thinking I could request seller financing from a motivated seller, but how could I finance a full renovation, especially in an expensive market like Brooklyn?
It is possible, but not very probable. A building like the one you posted is easily high 7-figures or more.
You need cash and lots of it. Then, you will compete with all cash buyers.
@Aaron Wade Yes, I was looking in the Stuy and those properties easily in the 7 digits. I know I would need plenty of cash, I also figured I could find a property in tax lien. But how could I finance the renovations?
@Christopher Phillips , I was under the impression I could offer to pay the back payments and a little extra for the seller in return for the property. I get the property and they avoid foreclosure.
Even if you are able to get the seller to agree to that @Kadeem Swenson you will need to find a construction loan or a lender who will finance your rehab of the property. Have you spoken with any lenders yet? I would also caution you to not improve the property until you are the record owner. I've seen a few occasions where there was an agreement in principle, but once the buyer rehabbed the property, the seller reneged. Make sure your agreement is in writing and preferably down with a lawyer for you and a lawyer for the seller. Keep yourself protected!
Most loans aren't assumable. They are some exceptions.
So, you would have to pay enough so that the proceeds cover the past due payments, penalties, and enough for the owner to move out. That would mean that you're overpaying for the property.
Owner financing only works when there's equity. Shortsales usually don't have equity. Occasionally, you will find an homeowner that lost a job or retired and are behind on their mortgage but still have equity. But, they can't just sell you the house and not pay off their mortgage.
There is the possibility of doing a Subject To where you take possession of the property, make payments to the owner, who then continues to pay their mortgage. But the bank can't find out and you run the risk of the owner walking away and not paying their mortgage.
But, you're seriously are not going to do a Subject To on a $1m property in Brooklyn.
Thanks everyone for the advice! it all makes sense. I just wanted to know a creative way to see if its possible.