I have a FSBO near me that I'm toiling over. Owner wants 80k but it needs a lot of work including new roof, all new electrical, some structural repairs and an update to kitchen and two baths. That doesn't include finish work. The best I'm willing to offer them is 40k. I'm guessing repairs at 60k but I need to do a thorough work order (thanks J Scott for the Book on Estimating Rehab Costs). ARV is about 135k however there is one outlier at 180k. Average DoM is about 70 but that's after a hell of a winter.
I think the property is better as a rental than a flip, which will lower my repair cost. Renters don't need granite.
I have the funds for the purchase but would need crowdfunding or HML for repairs.
That means I would also have to refi after repairs to pay everyone back and hopefully put some cash in my pocket then rent the place out. From everything I've read, refi's are difficult for SFH before the one year mark.
Appreciate thoughts and opinions.
If you pay all cash to acquire the property (not including the repairs) and can document that it comes from your own account you can get what is called "delayed financing". Delayed financing allows you to get cash out on a property using the lesser of your acquisition costs or the current appraised value right after you close. Not every lender offers this.
The standard wait time with Fannie Mae is 6-months for cash out, so look for a lender who offers delayed financing if you're going to complete your rehab in under 6 months.
Best of luck!
You must be a BiggerPockets member to post on the forums
Join the world's largest, most open Real Estate Investing Community online, 100% free forever!