Rental Property Investor · Saint Louis, MO · Member since 2019 · 9 posts · 3 votes
Hello all,
Pretty new to the real estate investing world and I'm here to absorb as much information as possible! The wife and I are currently house hacking and are looking to do a couple flips to start out to get some cash flow to put down on other rental properties. That being said, I am curious to know everyone's thoughts on a fix and flip line of credit(specifically from Oracle Loans if anyone has used them?) and how they worked or how their experience was with them?
@Mike G. as far as qualifying for the loan is the same as any loan, do example, you find a house of $100k that needs $50k repairs, purchase price becomes $150k, if this is FHA downpayment is 3.5%, you have your GC to estimate the cost on a bid sheet, banks provide the bid sheet, it's just one sheet with itemized labor costs on one side and material costs in the other side. The appraiser will go out and appraise the forecasted value based on the bid sheet, even if the forecasts value comes in lower it's ok, you can go up to 110%. You can choose to roll in the mortgage payments up to 6 months in the loan if property is inhabitable. GC receives 50% of the material costs at closing and the in rest in 3-4 draws. You can refi or sell after the renovation. The pre-approval used to get on contract will be for the $150k
@Diana Muresan Yes these are good options but we will not be able to occupy the residence during the renovation, eliminating some of the financing options you mention. Thank you!
@Mike G. as far as qualifying for the loan is the same as any loan, do example, you find a house of $100k that needs $50k repairs, purchase price becomes $150k, if this is FHA downpayment is 3.5%, you have your GC to estimate the cost on a bid sheet, banks provide the bid sheet, it's just one sheet with itemized labor costs on one side and material costs in the other side. The appraiser will go out and appraise the forecasted value based on the bid sheet, even if the forecasts value comes in lower it's ok, you can go up to 110%. You can choose to roll in the mortgage payments up to 6 months in the loan if property is inhabitable. GC receives 50% of the material costs at closing and the in rest in 3-4 draws. You can refi or sell after the renovation. The pre-approval used to get on contract will be for the $150k
as far as qualifying for the loan is the same as any loan, do example, you find a house of $100k that needs $50k repairs, purchase price becomes $150k, if this is FHA downpayment is 3.5%, you have your GC to estimate the cost on a bid sheet, banks provide the bid sheet, it's just one sheet with itemized labor costs on one side and material costs in the other side. The appraiser will go out and appraise the forecasted value based on the bid sheet, even if the forecasts value comes in lower it's ok, you can go up to 110%. You can choose to roll in the mortgage payments up to 6 months in the loan if property is inhabitable. GC receives 50% of the material costs at closing and the in rest in 3-4 draws. You can refi or sell after the renovation. The pre-approval used to get on contract will be for the $150k
Ok that sounds good I would like to chat with you on PM of phone and discuss further. thank you so much for the great broken down step by step description.