Ok, so i my dads leaving me a house at 7022 N Lombard St, 97203. Its really old but has good zoning. We owe 190k still on it. I just recently tried to take the loan over but i dont make enough on my taxes. I currently care give for my father making pennys. So ive been trying to look at investment opportunities. I really want to knock the house down and build a 6 plex to hold. I talk to a couple builders and they're all quoting 1 million to about 1.4 for the build budget. Can any one help me in how i can make this happen with no way of getting a loan. I have a 800 credit score, but im lost in this world. I want to learn though. I know if i get a deal or 2 under my belt ill be able to navigate into doing real estate investments full time.
p.s. and if anyone has better ideas for the property let me know. Also its zoned to have a store front also. Is it better to have all residential, a mix, or all commercial?
New construction in multifamily is a risky business and it’s extra risky trying to fill in the “missing middle”. Those 2-10 plexes that just aren’t being built anymore. The reason why it’s so expensive is because of civil engineering and utility upgrades required in the street along with half street improvements and other unforeseen costs that you run into.
It’s definitely best to find a property that you can acquire that already exists. I would highly recommend finding a seller of a multifamily who is tired of managing their property and ask them if they’d be willing to owner finance.
As well I highly recommend either getting into property management or becoming a realtor to make income on the side so you’ll be able to get a loan. The extra bonus with becoming a property manager is that you’ll meet potential sellers whose properties you can acquire.
I have acquired over 20 of my clients properties as they wanted to sell. One of those deals was an owner financed deal when I couldn’t get a loan. After a few years I was able to get a loan and didn’t need to do owner financing. Now though, I have to start talking about owner financing again because I have 10 mortgages in my name and that is the Max for Fannie and Freddie.
If you're interested in becoming a broker or a property manager shoot me a pm, we are always looking for new motivated real estate professionals at our company, Uptown Properties LLC.
You may want to consider something smaller for now- How much will this property rent for as-is? How much will it rent for is $20K in upgrades/repairs? You didn't say how many rooms, baths it has, but the photo online looks like it is decent size.
Alternatively, sell for the gain and purchase something for all cash- You may need to find another area- like the midwest where you can buy a decent house for $100K
@Melvin Allotey Redfin has estimated value at $380k. I have no idea what you can sell it for, but why not sell it?
Or maybe you find a local investor who will joint venture with you where they provide the rehab money, perform the rehab money, and then get a fair equity split when the house sells (after their rehab money is returned)?
Building your own multi family as your first investment sounds really risky. There should be a good bit of equity from the sale to allow you to move forward in real estate investing from a very powerful position. Not many beginners begin with $80k+ in cash.