Wanting to buy a house, but the other is not yet ready to sell

3 Replies

BP friends, I have a question on how I should best manage my scenario. I currently have a property having repairs done on it and plan to sell it once those are done, but it likely won’t be done for a couple more months. On that property I'll end up with $50+k in equity. Another property just popped up in my area that I am definitely interested in, and I could pay cash for once my other property sells, but I won’t have the cash on-hand until the other one sells. What’s the wisest approach to use here?

@Oliver Sparks Find a lender that will lend you on your current property via an LOC so you can purchase the current home cash. Why would it take you months to get a property renovated? We have done massive massive renovations spending 45k or more in under 5 weeks. If you have the majority of the repairs done by the time the bank has an appraisal then you should be able to get a significant amount of equity and you should be able to offer a cash offer with 2-3 week to close. If this place is as good of a deal as you say it is an it is on the market you likely will need a cash offer to get it, as a contingent offer on your place selling likely won't get it. The risk you run is if for some reason you cannot get the funds out in time you lose your EMD unless you have contingencies in place. In my market it's nearly impossible to get a great deal on a flip with contingencies outside of a 24 hr inspection so your market may be different.

@Casity Kao I'm not certain what labor costs are where you live, but $45k isn't massive where I'm from. A full reno is typically 2-3 months ($60-90K around here depending on the size and scope). 

@Oliver Sparks that property isn't going to sit around for you to get a LOC extended nor for you to sell your house. I would look at hard money if the deal has the meat on the bone to support the expenses. Real estate is about leverage, in this case you are leveraging someone elses capital to make you more money. It would require you to come up with SOME money, but there are HML out there funding 90%+ of a deal. If that property is still sitting there when you're done selling yours then it isn't a good deal and has been passed on by numerous investors at that point.

@Evan Roberts  I am referring to Michigan but I am originally from California.  For 90k, I could build a 2 bedroom home with basement from the ground up.  Even if we had to pull drywall, electrical and plumbing permits it would not take us 3 months to complete a flip.  Something about your process is slowing you down.

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