Duplex/mother in law suite deal
Hello fellow BiggerPockets members.
I will start by explaining my current situation. I am married with a 9 month old son. I work a full time construction job with a high credit score. I bought my first property with built in equity about 2 years ago in LaCrescent, MN. In that time I have done some renovations to the property to bring up the value. I've looked at the comps and talked to a couple of realtors in my area and believe I have about 30K in equity roughly. I don't have much money in saving .
I found a rare duplex/mother in law suite in my area 3 blocks away from my current residence. Its listed for 225K for sale by owner and its been on the market for 2 days. My family and I did a walk through today and want to put an offer on it. Full remodel in the last year. all new windows, doors, roof, soffit, driveway, sidewalk, stairs, fully finished basement, new hot water heater, new furnace. The problem is I don't have the cash necessary for the down payment and earnest money yet. This house has a lot of competitions for it and I believe it will sell in a few days. My wife and I were able to build good rapport with the seller for what that is worth.
In theory. I want to buy this duplex, live in one half and rent out the other. After I move to the duplex I would rent out my current residence. With the money coming from the singe family home and mother in law suite and my full time job, I should have more than enough money to cover both mortgages.
I have never been a land lord before and the biggest risk I see is the transition period between my family moving and getting tenets moved into place as fast as possible. I don't have any money saved for Cap X expenses. Obviously I'm not in the best position to buy but this is the perfect deal to meet goals my if I can make it happen.
So the way I see it my options are as followed:
I can get creative using the equity from my house.
I can try to raise money through private money lenders
I can try to raise money through hard money lenders
I can get the money through a traditional bank loan.
Should I do whatever it takes to put a offer in with a few thousands dollars earnest money and figure out the finances during the due diligence period? Im not sure what answer I'm looking for but any advise would be much appreciated.
Thank you,
Ryan Woodard