Rental Property Investor · Goldsboro, NC · Member since 2020 · 11 posts · 2 votes
I have been pre approved and I’ve studied the area but I don’t have any capital to rehab but I see good deals. What are other ways to cover the cost of renovations ?
Springfield/Eugene OR · Member since 2019 · 17 posts · 12 votes
6y
I recommend saving up for rehab costs before purchasing an investment that requires a lot of work. There's always credit cards to put it on, partnering with someone, or giving a contractor an equity position, but nothing beats saving up on the front end.
Springfield/Eugene OR · Member since 2019 · 17 posts · 12 votes
6y
I recommend saving up for rehab costs before purchasing an investment that requires a lot of work. There's always credit cards to put it on, partnering with someone, or giving a contractor an equity position, but nothing beats saving up on the front end.
If buying a place requiring renos, make sure you have the money to do them. Places like Home Depot will do 6 months no interest, but that is only for supplies and you need to make sure you can pay that back on time.
Investor · Boulder, CO · Member since 2016 · 1k+ posts · 1k+ votes
6y
@Jaumaure Hanzy If you don't have the money to do the deal, you need to find it first. This isn't the time to put everything on credit and hope it all goes smooth. You are not investing from a position of strength. Like Caleb, how are you paying for the house? You have options here, but they will all require money.
As far as the rehab, you can either save up for it yourself, get hard money lender (which again you need high reserves right now), or find a partner who has the funds. If this is your first project, your partner will most likely need to be friend or family... someone who knows you really well since you have no track record. Rehabs go over budget 99.9% of the time, so underwrite really well and add in a larger than normal contingency.
Also, I'd lean heavily towards a BRRRR strategy right now as we don't know what will happen to home prices (if anything). Be sure your numbers make sense with 10%+ lower on the ARV. Also, have your take out lending in place before you even close on the property.
You can do this... You will need a very solid plan though.
Specialist · Delran, NJ · Member since 2016 · 2k+ posts · 951 votes
6y
You can get business lines of credit, but as @Whitney Hutten said, this is a very precarious time to get started in real estate low on cash. A lot of cash poor, new investors are going to take a hit in this because they don't have the resources and connections more experienced investors have or the cash reserves to make up for it. It's like taking up sailing in a tsunami.