I've been wanting my first investment to be a multi unit, preferably to house hack in, too.
WELL...I was just sitting outside.. when, for the FIRST time ever, a man came walking into his backyard of the duplex next door - where I've never seen any movement of any kind over the year or so I've lived in the duplex I'm in.
He introduced himself as the owner, and seems very motivated to sell. He's sick, needs to care for a relative, and the duplex he owns has been vacant for 10 years. He owes nothing on the mortgage and wants 300k for the duplex. I looked it up on the county website and it's been appraised for 308k and the market value according to the site says 368k. He told me he keeps getting letters and postcards (of course) but that he's got a friend who keeps bothering him telling him he wants the duplex. That friend owns several properties.
This owner is aware that many flippers won't do 300k because it doesn't give them much room to invest to remodel it and still have a nice profit. And, the owner seems to be pretty concerned about getting "what he deserves"
- it's a 2 bed in each unit, one unit has a room that has been converted to a studio (? unclear about what he means by that)
- been vacant 10 years
- filled with his "stuff" and storage, which he needs to empty and says he will before closing
- roof was done 7 years ago
I haven't seen the inside so it's tough to even try to accurately estimate how much repair it would need to be a solid rental. In my area of Fort Lauderdale, average 1 bedroom apartments rent between 1200-1400 generally. For a two bedroom, maybe around 1600 for a decent livable apartment
I told him I was interested and I really think I'd only have a shot if I was able to come close to his asking price. However, you never know.. if he was to have a cash offer maybe he'd come lower just to have the place off his plate.
I cannot get a loan from a bank or CU right now due to recent unemployment.
In a situation like this, can I find hard money lenders?
I haven't looked much into hard money lenders except I know they charge a higher interest rate than a bank or CU would. However, considering if I could refinance in 1-2 years, I would be able to take out a loan which would pay the hard money lender back in full, and then I would simply owe the bank the mortgage and at a lower interest rate for 30 years. Correct?
I put the numbers into the rental calculator on BP and played with some numbers to try to get as accurate as I could without stepping into the property.
It's a little confusing to find hard money lenders on here. Does anyone know the best way to connect with a hard money lender?
I’m still wondering how you saw someone walking into their backyard. Was the fence broken? Add that to rehab costs for repairing.
Anyway, your local REI group will have hard money lenders. It's best to use one sent to you from referrals.
What a great stroke of luck to run into the owner tho! Great job!
@Cheryl Vargas haha, yes the fence only goes half way. He said the other half blew and hit the house a couple times in hurricanes (Florida .. were right near the beach)
ok great insight! Thank you!!
I may be able to assist you here. We manage an investment fund lending to borrowers in scenarios just like this. Check us out: www.dmlcap.com. Let's chat--would love to answer any questions and see if we can be a financing solution for you.