A friend wants to buy a wholesale or fixer-upper

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A friend wants to buy a wholesale or fixer-upper

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TX · Member since 2009 · 122 posts · 11 votes

A friend of mine in the Fort Worth Texas area has been going through some hard times with job changes, family trouble etc, and he says his credit has been damaged. He wants to buy a "fixer upper" and do the rehab himself for his own residence. I suggested he consider a wholesale deal or some investor type deal, but that he would typically need cash to close. This is the problem, no or little cash. He does have a high paying job however. His ARV price range is about 120K.

What is the best option for him? If it takes him 1-2 years to fixup, then the financing he gets in the mean time could eat up any savings from getting a whosale price. Are there other types of financing for rehabbers? Govt programs for rehabbers?

Since he is in no hurry, I think the best option for him, is to simply save 30-50K in cash, and THEN go looking for a wholesale deal.

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  • Curt DavisBusiness Member
    Flipper/Rehabber · Memphis, TN · Member since 2008 · 5k+ posts · 2k+ votes
    17y

    Randal,

    There are no programs for your friend that I know of. It will be very difficult for him to do anything with his current situation.
    He needs to get his credit score up. If he has a high paying job he should be able to cure any debt problems in a reasonable amount of time.

    Curt Davis - KAIZEN Realty538 Reviews
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  • Valerie Pedigo
    Real Estate Investor · Pittsburgh, PA · Member since 2009 · 73 posts · 18 votes
    17y

    Has he considered a lease purchase, sweat equity, or owner-financing? If he is looking for a distressed property, I'm sure there are sellers that would trade the down payment for the rehab. Or even spread the down payment over several months as a note. If he isn't in a rush, then he can start calling motivated sellers, just like an investor would and take his time finding the right creative deal.

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  • Eddie Ziv
    Investor · Mableton, GA · Member since 2009 · 1k+ posts · 465 votes
    17y

    Here is my 2 cents:
    Your friend is aiming too high ($130K ARV) There are houses in DFW (Realtor.com) that sell for as little as $8,500. My advise is to make any effort (Borrow from friend, co-worker, family, etc), Sell goods, whatever it takes to buy one of those houses. Live in it while he rehabs. Not easy, but possible. Then in two years he can see a chunk of money by either refi or selling.

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