Real Estate Broker · Chicago, IL · Member since 2019 · 23 posts · 10 votes
Hi everyone! I Just signed up for BiggerPockets this is my first post, I’m new to the industry but yet willing and ready to learn more.
I’ve been looking at a property that I can pay cash for, The property isn’t expensive and only need cosmetic work done. I don’t have all the funds to do the cosmetic work.
Rental Property Investor · NY · Member since 2019 · 8 posts · 2 votes
7y
@Sophia Coleman I hear you. I haven't done any of my own repairs or cosmetics on my first property but I did learn how to recognize the greedy, overpriced contractors from the quality reasonable ones. When you get your first property expect for some contractors to see you coming and try to get all that they can but the more savvy and experienced you become the more you will be able to leverage a deal that works for both of you.
Rental Property Investor · Augusta, GA · Member since 2017 · 825 posts · 278 votes
7y
Hi Sophia,
Congrats on being able to pay cash for the property! You don't say whether you are planning on a cash out refinance when it is up and running, that will influence your options.
There are several options for you for rehab funding-
some people like to use HELOC (home equity lines of credit). this works if you plan on refinancing and paying it off in a short period of time
make friends at your local REI group. There will be someone there who would be happy to loan using the property as collateral, considering that you own the property free and clear.
a business line of credit, or personal line of credit are possible, but likely pricier than the first two options
depending on the condition of the property, you might be able to do a "delayed owner finance" on it, and get about 75% of your purchase price back to use as rehab money
Lender · Glenview IL- CDLP NMLS#230554 · Member since 2015 · 2k+ posts · 747 votes
7y
@Sophia Coleman Start with your own bank where you do banking. When you done with rehab, you can cash out under delayed financing exception but make sure this is right program for you.
Rental Property Investor · NY · Member since 2019 · 8 posts · 2 votes
7y
@Sophia Coleman Since you have excellent credit why not use a credit card? Also Home Depot has create DIY videos to save you money on hiring a contractor for small jobs you can do yourself like redoing a floor with laminated sheet tiles. You'd be surprised at how much cosmetic work you can do yourself and have your property in turnkey condition in little time.
Rental Property Investor · NY · Member since 2019 · 8 posts · 2 votes
7y
@Sophia Coleman I hear you. I haven't done any of my own repairs or cosmetics on my first property but I did learn how to recognize the greedy, overpriced contractors from the quality reasonable ones. When you get your first property expect for some contractors to see you coming and try to get all that they can but the more savvy and experienced you become the more you will be able to leverage a deal that works for both of you.
Lender · Arlington, TX · Member since 2018 · 465 posts · 184 votes
7y
Multiple options.
Do you need to buy it with cash?
You could look at financing purchase so you don't use all your money. Obviously that has to fit the sellers situation.
There are millions of options for that.
If paying cash is important then some hard money lenders have"same as cash" cheaper flip loans for just the purchase of the property. Then you do rehab out of pocket and refinance or sell quickly to get out of loan.