New investor chasing my first deal...advice appreciated !!

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New investor chasing my first deal...advice appreciated !!

Les Richardson
New to Real Estate · Shelbyville, KY · Member since 2022 · 14 posts · 1 vote

I`m looking at a 950 sq ft ,2/1 condo ...asking is 110000, ARV looks to be about 175000.It needs flooring ,paint ,and a light bath and kitchen update. The seller is willing to "sub to" the mortgage of about 50k. I`m trying to decide how to make the deal work, I could take a HELOC on my primary,( only as a last resort ) or find a private ,or hard money lender to cover the down payment on the 60k & closing costs.

What would you advise ??

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Taylor DaschBusiness Member
Real Estate Agent · Temple, TX · Member since 2022 · 1k+ posts · 700 votes
3y

It sounds like a Private Money Lender may be a good option for this scenario so long as the numbers work out well and there are plenty of comps to support the 175 ARV. For flooring, paint, bathroom, and kitchen updating on a 950 sq ft property, it shouldnt be too crazy of a rehab. It sounds like a good deal! I would start searching for someone to cover that 60k!

[email protected]254-718-4249
Taylor Dasch | EG Realty561 Reviews
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  • Taylor DaschBusiness Member
    Real Estate Agent · Temple, TX · Member since 2022 · 1k+ posts · 700 votes
    3y

    It sounds like a Private Money Lender may be a good option for this scenario so long as the numbers work out well and there are plenty of comps to support the 175 ARV. For flooring, paint, bathroom, and kitchen updating on a 950 sq ft property, it shouldnt be too crazy of a rehab. It sounds like a good deal! I would start searching for someone to cover that 60k!

    [email protected]254-718-4249
    Taylor Dasch | EG Realty561 Reviews
    WebsiteView Page
    2Reply
  • Les Richardson
    OP
    New to Real Estate · Shelbyville, KY · Member since 2022 · 14 posts · 1 vote
    3y
    Quote from @Taylor Dasch:

    It sounds like a Private Money Lender may be a good option for this scenario so long as the numbers work out well and there are plenty of comps to support the 175 ARV. For flooring, paint, bathroom, and kitchen updating on a 950 sq ft property, it shouldnt be too crazy of a rehab. It sounds like a good deal! I would start searching for someone to cover that 60k!


     Thanks Taylor ...I appreciate your input !!!

    0Reply
  • Scott E.
    Contractor · Scottsdale, AZ · Member since 2010 · 2k+ posts · 3k+ votes
    3y

    Sounds like you need more than $60k.

    -You need $60k to cover the difference between $50k and $110k.

    -You need another $5k for closing costs.

    -You need around $30k for rehab.

    -And you'll need another $5-$10k for holding costs during your rehab.

    So that means you need more like ~$100k to pull this off. Still will put you under the ARV by about 15% when you're all done with it. Not a bad deal if you plan to hold it. Just make sure you're confident in that ARV number.

    A hard money lender is going to require you to put some skin in the game. How much cash do you have?

    1Reply
  • Bob S.
    Real Estate Consultant · Cleveland · Member since 2020 · 6k+ posts · 3k+ votes
    3y
    Quote from @Les Richardson:

    I`m looking at a 950 sq ft ,2/1 condo ...asking is 110000, ARV looks to be about 175000.It needs flooring ,paint ,and a light bath and kitchen update. The seller is willing to "sub to" the mortgage of about 50k. I`m trying to decide how to make the deal work, I could take a HELOC on my primary,( only as a last resort ) or find a private ,or hard money lender to cover the down payment on the 60k & closing costs.

    What would you advise ??


     Since this is your 1st deal ., just flip the contract for 5- 10k. Its highly unlikely anyone is going to loan you money any money since you have no experience. So flip it , learn save then go on your own

    Good Luck 

    PS do not pay more than 100k, all in 120kish, add 5k for you, so 125k, leaves about 40k im profit, win win , 

    0Reply
  • Les Richardson
    OP
    New to Real Estate · Shelbyville, KY · Member since 2022 · 14 posts · 1 vote
    3y
    Quote from @Scott E.:

    Sounds like you need more than $60k.

    -You need $60k to cover the difference between $50k and $110k.

    -You need another $5k for closing costs.

    -You need around $30k for rehab.

    -And you'll need another $5-$10k for holding costs during your rehab.

    So that means you need more like ~$100k to pull this off. Still will put you under the ARV by about 15% when you're all done with it. Not a bad deal if you plan to hold it. Just make sure you're confident in that ARV number.

    A hard money lender is going to require you to put some skin in the game. How much cash do you have?


    Valid points...I think we can accomplish the rehab for considerably less than 30k...I plan on handling that personally .I especially appreciate your thought on the ARV value confirmation as well...if thats not correct the whole deal is a no go.

    0Reply
  • Les Richardson
    OP
    New to Real Estate · Shelbyville, KY · Member since 2022 · 14 posts · 1 vote
    3y
    Quote from @Bob S.:
    Quote from @Les Richardson:

    I`m looking at a 950 sq ft ,2/1 condo ...asking is 110000, ARV looks to be about 175000.It needs flooring ,paint ,and a light bath and kitchen update. The seller is willing to "sub to" the mortgage of about 50k. I`m trying to decide how to make the deal work, I could take a HELOC on my primary,( only as a last resort ) or find a private ,or hard money lender to cover the down payment on the 60k & closing costs.

    What would you advise ??


     Since this is your 1st deal ., just flip the contract for 5- 10k. Its highly unlikely anyone is going to loan you money any money since you have no experience. So flip it , learn save then go on your own

    Good Luck 

    PS do not pay more than 100k, all in 120kish, add 5k for you, so 125k, leaves about 40k im profit, win win , 


     Sounds like the voice of experience..Thanks !!

    0Reply
  • Bob S.
    Real Estate Consultant · Cleveland · Member since 2020 · 6k+ posts · 3k+ votes
    3y
    Quote from @Les Richardson:
    Quote from @Bob S.:
    Quote from @Les Richardson:

    I`m looking at a 950 sq ft ,2/1 condo ...asking is 110000, ARV looks to be about 175000.It needs flooring ,paint ,and a light bath and kitchen update. The seller is willing to "sub to" the mortgage of about 50k. I`m trying to decide how to make the deal work, I could take a HELOC on my primary,( only as a last resort ) or find a private ,or hard money lender to cover the down payment on the 60k & closing costs.

    What would you advise ??


     Since this is your 1st deal ., just flip the contract for 5- 10k. Its highly unlikely anyone is going to loan you money any money since you have no experience. So flip it , learn save then go on your own

    Good Luck 

    PS do not pay more than 100k, all in 120kish, add 5k for you, so 125k, leaves about 40k im profit, win win , 


     Sounds like the voice of experience..Thanks !!


     Not my 1st bbq, ITS ALL about the numbers, 

    1Reply
  • Eliott Elias
    Investor · Austin, TX · Member since 2021 · 9k+ posts · 5k+ votes
    3y

    Deal sounds tight, try to buy at 100k. Be as little out of pocket as possible and request for a larger balance to be assumed. 

    0Reply
  • Les Richardson
    OP
    New to Real Estate · Shelbyville, KY · Member since 2022 · 14 posts · 1 vote
    3y
    Quote from @Eliott Elias:

    Deal sounds tight, try to buy at 100k. Be as little out of pocket as possible and request for a larger balance to be assumed. 


    Hadnt thought about asking for that...I am also awaiting some clarification about the HOA...THANKS Elliot

    0Reply
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