Working on my first deal, Need your suggestion,Cash buy Finance?
Hi Guys,
I am new to the forums and am currently working on my first deal. Here is the scoop, we found a home that we thought was currently owned. Come to find out it is sitting empty and has been for awhile after a foreclosure. I have pulled the comps with my realtor as well as done my own research and found this home will meet the 70% rule. Here is the breakdown.
-1500 sq ft Home with 500 of finished attic space we plan to have included. Over 50% is higher than 7' and will be finished out the same as rest of home with full bathroom.
- Neighborhood averages $136 per sqft for run of the mil homes, comp homes, modernized run on average of $165-$185. We have 3 immediate, recently sold homes that were 1800-2000 sqft that sold between 250k and 290K with similar finishes done.
-I think i can get the home for $75k. I have walked the home several times plus with my contractor. I have put together a rehab budget of $128,500K. I honestly think I can do this project for $100K Max once we get started. I am know to drive a good bargain, while keeping contractors happy. ( I own a non related business that utilizes sub contractors from time to time.)
-All said in done, at 128,500 I am meeting the 70% rule, anything below that will be on top.
Here is my dilemma where i need your experience. I am short on cash on this deal. I have 80K on hand my self, should i use my 80K to make a cash offer or should my offer be contingent on financing which i know without a doubt i am eligible for. The home is being sold thru an auction an I know cash appears much better in this situation. If i use up my cash then i will need to take a mortgage on the house or a heloc. I have reached out to a few potential PML but since there experience with me is still new I am not holding my breathe here yet. HML is too expensive, i will find other creative ways to get the deal done. Thoughts on cash offer or financing?