Just had my offer accepted. Now what? - Long Beach, CA
Hello everyone,
First of all, I'm so glad I found this place. One can literally spend years reading everything here. Problem with that is, the more I read the more I feel like I know nothing ( which is very close to the truth).
Here is my situation. I've been looking for a property around Long Beach. I live in a nicer area of the town and my funds wouldn't allow me to invest here, so I started browsing through the more affordable areas. As you maybe know, California is not the easiest place to find cash flowing opportunity. I did however stumbled upon a single family house in rough shape, that after all the repairs might be a good candidate for keeping as cash flowing rental, or a flip.
I've been reading and researching and feel like I understand the concept ( flipping or rehabbing and keeping as rental). Many of the details, though, seem quite vague for now. I'll try to summarize in this post most of my questions.
1. My idea is to use conventional loan, with 10-15% down, and for the rehab use the rest of the cash that I have + probably either hard money lender or get some help from my visa and masters cards ( I know that's not a great idea, so might keep it as last resort). The offer I made is for $230K and the projected rehab will cost $45-60K. What other options do I have for getting those $30-40K besides the hard money lenders? BTW, feel free to recommend if you know any that work with this type of loans.
2. Still not 100% sure how it works with the mortgage. Can I buy it, rehab it in 2-3 months and immediately after that request re-evaluation of the property and try to pull out what I invested in the rehab? From what I've been reading it seems like that, but aren't there any fines for refinancing earlier than a year after the close or something like that? Do I need to initially discuss that with my lender and make sure he does?
3. When it comes to rates, I'm pre approved with 2 of the biger banks - US Bank and Wells Fargo, but I see some smaller lenders offer lower rates. Which ones work better for what I plan on doing if it matters at all?
4. Is it a good idea to pay some extra after a year? Since I'll go with fairly low down payment, if I pay extra 10-15K for the mortgage, this will remove the PMI, right? Plus will drop my monthly payment and therefore improve the cash flow. But can I do this whenever I decide?
5. Now on the more technical stuff. The roof has to be redone. It has 3 layers. Price wise, does it matter if I'm redoing a roof that has 1 layer or 5? My guess is it does, but how significant? And what's a realistic price for redoing a roof like that if the house is roughly 1300 sq ft?
Thanks in advance for the help, guys.