Investor · Santa Rosa Beach, FL · Member since 2013 · 50 posts · 7 votes
Hi all.
I found a 3 bed, 1.5 bath property on a B- street that was a former rental ($1300 p/m) and has just undergone about a 90% re-hab. It has no kitchen or bathroom installed, and so is not available for a conventional loan. I can't see anthing seriously wrong with the property at all, and to finish the rehab would cost approx 10K. Asking Price for cash buyers is 110K, ARV approx 150K. Possible flip.
I have an investor that has expressed an interest in doing a deal with me in passing (based on my recent successful rehab that is now rented and cash flowing).
Do you have advice on how to approach him and how I might structure this deal to benefit both of us? Ideally I'd like to refi after the rehab and keep it as a rental.
(because the rehab is mostly done, I am not bringing much value other than the deal, which isn't under contract)
Developer · Houston, TX · Member since 2015 · 1k+ posts · 1k+ votes
9y
It has no kitchen or bathroom and you think it's 90% done? Should account for much more than that and I would imagine it would cost much more than $10k. Seems like a slim deal even if everything goes perfectly in the rehab.
Investor · Santa Rosa Beach, FL · Member since 2013 · 50 posts · 7 votes
9y
I actually think the rehab will cost less. The Kitchen cabinets are in the property, as are fans, light fittings, bathroom sink... the biggest expense would be a refrigerator and hot water heater .and flooring in the bedrooms. It is freshly painted and floor tiled and has new A/C.
Any thoughts on how to approach a private lender, or how to structure a deal where I would refi and keep the property?
Developer · Houston, TX · Member since 2015 · 1k+ posts · 1k+ votes
9y
If you have someone interested in lending already then it's a matter of just negotiating rates with them. 6-10% and possibly a point or two. It's all up to you, the lender, how comfortable they are with you and the property, and how much return they're looking for. They would hold first lien position on the title until you refinance, at which time the bank will be in that role.