Found a PROPERTY BUT NEED HELP!!

[Shant Ohan]

Hi Everyone,

So as everyone is aware trying to find a BRRR property in california is not easy. I was able to find a property that is mostly finished besides the flooring BUT it also needs septic and requires the county water hook up. I think the property ( I haven't been there yet) requires flooring, sheet rock, and some minor details like base boards. It is a 2b/2b but I would like to convert it into a 3b/2b. Property is 159k and 1280 sgft and the lot is 7841 sgft. I have two question:

1. Will banks finance a property even though it is not complete/live-able? 

2. Would this be a deal someone would take on as a first time home buyer(knowing that it requires water/sewage)? The numbers would work out to rent this property and average property prices in the area are around 300-400k 

Anything else I should consider as a first time home buyer before I get too caught up on this deal?

Thank you!! 

[Chris Tarpey]

1) If you intent to occupy the property, you can use a loan product that wraps renovations. If it is strictly investment, you may find a smaller bank willing to lend based on the numbers, but the larger, more well known ones may not assume the risk.

2)Its a bit of a bite for a first property but manageable. First thing would be to walk through with a contractor and get your estimates, maybe more than one, so you can sit comfortable knowing exactly what needs done, and how much it will cost to do so. Then go back and check the numbers to see how it will work out, and if it is still a deal you can personally pursue.

3) From your last line, DON'T get too caught up in the deal. There an be a lot of operating with blinders on when trying to get the first property, but don't jump on it for the sake of getting a property, make sure the numbers work, you get your estimates, you know where capital is coming from, you have reserves in place, you are working with a good realtor to pull accurate comps. Due your due diligence but treat it as an investment, if it doesn't work, fold and go after the next one!