Buy and Hold...How would YOU structure this deal...?

2 Replies

(ARV x 0.7) – Repairs = Maximum Purchase Price

Me and partner are looking at an off-market townhouse that needs 150k of work and has an ARV $1,100,000.

(1,100,000 x .7) - 150,000 = 620,000

620k would be the max purchase price then

It rents for 6.5k/month, property taxes are 10k/year---a decent 1%er

I ran the numbers thru the rental property calculator with putting 20% down and get conservatively 10% CoC

We believe the property to be a good deal. He brings a construction background to the table and property management. I bring property management to the table and investors. He found the deal. Also, it is a bit time sensitive and the owner will bring this to the market in about a months time...

Is it possible to combine 3 strategies here and do a 3% FHA, BRRRR, AND a construction loan? If so, and we DID do all that stuff, It seems a bit tricky for me to wrap my head around it...does anyone have any advice on how to boil this thing down into simpler terms?

My hope is that I can capture some equity here without using ANY of my own money

Thanks in advance for any help:) 

...and sorry for the poor formatting, it's getting late

The 70% rule isn't really meant to be used for rentals.  

This property would scare me. Every month it sits vacant is costing $4k.  I don't know how fast things in this price range rent or how often they go vacant but I would sure want to know.