Financing First Deal-Private Money
Hello all. I had a great meet-up last night with fellow BP'ers in the area and it seemed the consensus for a first flip is find something "easy". I think i have found one that has comps in the $200,000+ range and i can get for 140's. I'm trying to find ways to finance it unconventionally because I don't want to hold onto it for 6+ months. Here are some details.
Sales Price: let's say 145k
Closing Cost: 3,000 (i'm rolling in my 3% realtor commission to closing costs as well)
Renovation needed: 15k
RE Tax: 450/month
Insurance: 150/month guess
ARV: $205,000. A house 2 blocks away with same floorplan and sq footage sold at this price in 5 days.
Here is the tricky part. I have about 15k cash to play with. Would a private lender be willing to take that 15k as a down payment on a $145k loan? Is an interest only, 10%, loan appropriate? How else can i structure it to make it attractive?
I see monthly payments playing out this way.
Interest from loan: $1,450
Tax-$450
Insurance-$150
Utilities: $50
Total: $2,100 a month * 3 months to flip= 6600 carrying costs
So in the end:
$205,000 sales price
less commission: $12,300
less closing cost: $5,000
less seller assist: $3,000
Total: 184700
Profit: $1847,00-$169,600= $15,100
Obviously not a killer deal but something to get started and experience. The renovations include adding carpet and finishing a dry, w. sump pump basement.
Any advice here is tremendously appreciated.
Aaron