How to structure this deal?
Hi, how could I structure this deal to be little to no money out of pocket? I don't mind paying a little out of pocket at closing but I want to have some for repairs. The asking price is $65k, tax appraisal is $78k. So I think the max offer should be $55k. I am offering $45k but it does need about 10k in repairs. Most banks require 20% down which is still close to $10k down. Would it be wise to try and get the repairs rolled into the loan or find a private lender? What creative financing could I do to keep money in my pocket for repairs and get the deal done. It is in a pretty good location and would rent fairly well.
@Nathan Frost Have you spoken with any banks or brokers? Some lenders have minimum appraisals or loan amounts. There are products that can finance the acquisition and rehab, but you'll probably have to refi after completion.
Are you familiar with the BRRR model? If you can put up your own money initially for the acquisition and rehab, you could cash-out refi and get your money back. Say after your rehab it appraises for $74k and you cash-out refi at 75% LTV, that's $55k back in your pocket (or ~$20k if you leveraged the acquisition and rehab).
That being said, in my opinion anything that requires a refi within 18 months carries more risk right now. The lending environment is shifting and difficult to predict, even if rates level out during that period.