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Tax, SDIRAs & Cost Segregation

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Samuel Peters
  • Homeowner
  • Spokane, WA
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16
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Need Help With Purchasing a House that's in Probate

Samuel Peters
  • Homeowner
  • Spokane, WA
Posted Aug 6 2020, 08:13

I am interested in purchasing a house on my block that's currently in Probate. I know the sellers and have for a decent time now. Their mother/father passed away without a will around 2 years ago so now the house is under probate while they're trying to sell it. This house needs tons of work (New roof, new flooring, new paint, hand rails, damn near new everything) and I know it wouldn't pass a VA inspection. VA loan would be the ideal route for me as it's 0% down with no mortgage insurance. I'm ready to spend money as I realize that i'll have to put a new roof on it as well as tons of cosmetic fixes (it's the no mortgage insurance that I'm really after).
With that being said, I spoke with the sellers and they said that IF we can get under some kind contract, they'd be willing to let me put a new roof on it, and do all the things necessary to pass a VA inspection. They're not in the position to pay for these things themselves, then raise the purchase price. So, I'm willing to do it and lower the purchase price.

Is it possible to get under some kind of legal contract that will allow me to do the necessary repairs, then be guaranteed that I'll be the one purchasing the house? I'm scared of doing and paying for the work, then someone else purchasing the house and they walk off with the profit (Don't think they're the type to do this, but rather be safe then sorry).

Maybe someone with some kind of experience could help me out here... Think it might be smarter to avoid that and purchase the house with a conventional loan (say maybe 5% down), do the repairs, then refinance it into a VA loan? Keep in mind I don't have TONS of capital to work with...
POTENTIAL numbers below...

Purchase price - 150-165K
ARV - 250-300K

10% Down Payment = 16.5K
Roof = 15K (I believe it will only be around 10 because I have a good roofer and I'll be the one doing the tear off)
Paint = 10K
New Appliances = 10K
New Flooring = ~3K (I'll personally install the cheap snap-in ones so this is just for materials)
Misc Repairs = ~10K (just to be conservative)

Total $ in = 65K

Potential profit from a flip/refinance = ~35K (if I refinanced for 250K)

Seems like it makes sense to me if I could refinance it into a VA loan, but will be much more difficult to find the capital. However, it seems like it'd make more sense if I could do the repairs and skip the Down Payment costs by initially purchasing with a VA loan....

Does anyone know who I would speak to to get into a legal contract with them (contract to allow me to do the repairs and be guaranteed that they sell to me)?

If you made it this far, THANK YOU for your time. If you know, PLEASE leave a comment so I can get started, as the clock is ticking!