So I found a great FSBO property, SFH, 2/3 constructed. Asking price is under 600 and the comps are anywhere from 1.5 to 3+. This sounds almost too good to be true! My only problem now is...finding a way to fund this project then to sell it. I lack the funds and my credit isn't superb, but climbing back up. Any recommendations for a new REI?
@Lee Burns Step back first and make sure it's really a deal. Your comps range is way too large, a $1.5M spread! What kind of repairs does it need? And why has no one else purchased it already if it's such a great deal?
I'm not too experienced just yet, but I've reached out to some partners to also investigate. It's been on the market 5 months, but it's still under construction so repairs wouldn't exactly be the word I'd use for it. I can't speak as to why noone else has purchased it yet, except nobody might be desiring to undertake the project; ha.
@Lee Burns Once you fine tune the numbers and if you decide to proceed, back to your original question, how to fund it? HML would probably be a great fit. You would probably have to partner up as you'll still need funds to put into the deal. Or try local banks in your area to see if they'll do purchase + rehab funding (speak to the commercial lending department).
You didn't mention your exact credit score but they may have more flexibility. Or have one of your partners co-sign on it.
Interested in helping you. You could do a hard money loan with an angel for an equity portion. or you could get a commercial loan with a bridge on top. There are options.
@Tom S. good idea. One of my partners is looking into the legalwork and comparing development costs with other contractors. Thank you for the tip on checking with commercial lending departments, I'll definitely check that out. My credit score is just shy of 700, but it's climbing up quickly. I'm inbetween jobs and expecting to start next week which will help a ton.
@Michele B. thank you for the tips, but could you explain what you meant by angel with regards to hard money lending and also what a bridge on top is?
@Jason D. if you're serious about your offer, please private message me and I will happily send you the details I have as of now and you can make your decision. Do you have that type of funding available?
@Lee Burns a bridge is a loan that is given to someone that will encompass the amount of closing costs, that will be paid out of the total first loan. As for an angel, i am talking about someone willing to give you the loan for a percent of Equity.