Funding a Couple of Pre-Foreclosures
Hey all, looking for some advice/possible inputs here. I’m a real estate agent in the Mid-Michigan area that’s finally looking to start investing in 2023. I found 2 potential great deals and wanted to get some input to see if it’s possible to fund both deals.
Financially, I have about 20k in business savings (plus a 2k commission coming in about a week or so), 6k in a stock account and 6k in a 401k. Real estate is my part time job with my full time being a W-2 job.
I have found 2 deals that are in pre-foreclosure that could be huge wins if I could get them for what I think I could possibly get them for. Deal #1 is a 3 bed, 1 bath at 950 sq ft with a basement listed at 120k and deal #2 is a 3 bed, 1.5 bath at 1150 sq ft also with a basement listed at 140k. Deal #1 could easily rent at $1200 a month and deal #2 could probably rent for around $1400 a month. Both owners are in default for about 75k and have to liquidate by March otherwise they will officially get foreclosed on. Property #1 has been on the market for a month and a half and property #2 has been up for a week, but it’s on the corner of a busy road so I anticipate it will probably sit.
I would think that if they got desperate, I could probably get each deal for around 85k if they got desperate enough. If I could them for that price, it would be an instant equity add as both properties are easily worth over 100k. Problem is, I don’t have the typical 25% down you’d need for an investment property. What path would you take in this situation? Hard money lender? Bring in a partner? Interested to see what others think.