First Time Homebuyer Funding Fear
Found an investment property where the location is great and comps are strong. However, the home itself is priced on the higher end of my price range and will require $80K in rehab costs according to the seller who is an investor himself.
A few low ball offers were already declined, and I'm not sure what those offers were. Currently houses on the street are comping for $60K-$90K higher than what it's currently listed at but it's been on the market for some time. I'm thinking about putting an offer that's $20K-$30K less than asking since I'm coming in with only 5% down. The seller doesn't need to sell the property right away so I'm hoping to tread carefully. I'll be living in it for 6-12 months as my primary residence, but would like this to kickstart my long term holding strategy in the future and rent it out.
Here's the catch.. I don't have the funds to cover the rehab costs and mortgage payment. I'm talking to a lender my agent recommended who offers rehab loans that are tied to conventional loans and I only need to put down 5%. It sounds similar to the HomeStyle Renovation and CHOICE Renovation loans, since the rehab loan is based off the ARV, not the upfront costs. Are my other options for funding this? If this gets approved, I'm hoping to work with the general contractor and do some of the repairs myself. While I know private lending exists, are there any other loans I should consider? Any help is appreciated!