Updated about 10 years ago on . Most recent reply
Potential Multifamily deal - Rehab cost question
Hello all,
I've been in the market for a multifamily (duplex) property that I can house hack in my area (North NJ) and may have stumbled upon a potentially good deal. There is a house for sale at around $150K in a desirable area. It has 2 units - a 3 Bedroom and 2 Bedroom. With some minor cosmetic changes the 3 Bedroom unit could generate over $2K / month in rent possibly 2500.
The problem is the first floor, which contains the 2 bedroom unit, is completely overrun with mold. Its coming from underneath the house, maybe pipes have burst I'm not completely sure. It would have to be completely gutted and replaced, probably costing in the $50K-$60K range just from a guesstimate from myself and my real estate agent. Even if the total cost after repairs for this property was $210K, I can see it being quite profitable.
My problem - I don't have that kind of money to put into repairs at this time, is there a way to incorporate construction costs into the mortgage? I was planning to do an FHA loan to put down 3-5%, and I've heard of the 203k FHA loan but doesn't that only go up to $30K and is quite difficult to get?
I'm thinking this may be too much for me to take on with all the work it requires, but I wanted to see what options there were. Thanks!
PS - If anyone has had experiences with a bad mold problem and would like to share please do!