I'm a newbie seeking to score my first deal in 2018. I live in PG County Maryland. Right now, my goal is to save $12k more for a down payment on a SFH that I will not live in. I plan to buy in a blue-collar neighborhood with a conventional loan expecting to put at least 20% down. My question is if I only save up for the down payment - how can I fund the rehab costs? Is it common for investors to borrow that money from the bank too? What is some advice for how to cover the rehab?
@Krystal Goode there are tons of programs that don't require 20% down. I would find a Loan Officer in your area that has experience with conventional or FHA rehab products
FHA won't be an option for you because this is a non owner occupied property and depending on the number of units, you could be limited to 75% ltv.
Many people buy their first property with FHA and get a multi family property to help defray the cost of ownership and reduce the cost of entry. At 3.5% down, it's the most affordable way to get into a multi family property. You could also go with a Fannie Mae product at 97% and get a 3% grant if this is your first home and you're going to live in it. If you're not going to live in it, you're relegated to investment property rates and ltv's.
You could go with a hard money loan (some go up to 100% of the purchase and the rehab), but if you're new, be prepared to pay for the down payment of about 20% plus costs and front the money for rehab and then get reimbursed.
Best of luck