Hello fellow investors, I need some guidance. There is a property that my buddies Grandpa is selling and it’s in the very upscale part of SoCal. Problem is it’s a HUGE home that is already beautiful, with over an acre of land, but needs modern upgrades since it has original features like green carpet. The home has a potential ARV of over $1 million over purchase price and probably needs about $200k-$300k in rehab/upgrades cost. I feel like it’s a great investment but obviously is more money than I have to cover the cost. Can you guys help me with some ideas as to how to purchase this home from my buddies Grandpa without using my own money? The asking price is just over $3 million. What is the best way to utilize lenders to make this happen? Again, I’m new to investing but a deal is a deal big or small and I see good money in this. Thanks for the guidance.
@Nick Robertson A deal is a deal big or small, but that comes with credibility and experience. You won't be able to finance that traditionally, which leads you to the hard money side or friends... It would be tough to get that amount as a new investor with little to no experience. The lender would want to see your portfolio and track record, you would also have to provide skin in the game. That's just my honest opinion, as someone that has been on both sides of lender and 'lendee.'
Why should I trust your feelings with my money? Answer that and find someone with the money to partner with....
Also am I reading this right? ARV is 1mil+ needs, 2-300k in work and they want 3mil for it?
The ARV should be in the $4.4 million range after the work that needs to be done. Comps for the area are few because of the type of property but there was one near with less square footage and smaller lot that sold for $4.2 million in April this year. Sorry for the confusion. And I am in the infancy stages as this was just presented a few day ago which is why I am reaching out for advise.
I'm not well versed in that price range, but don't those buyers typically go for the high end finishes/appliances which drive up construction costs significantly? Also, I' be curious how long something like that would take to sale your holding costs might be bit higher than "normal".
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