All Forum Posts by: Chantal Jones

Ah ok - I didn't think of that @Wayne Brooks.

Definitely something to consider since I don't know him from a hole in the wall.

So, you would suggest I purchase the property outright then?  And then proceed with rehab, once it's actually mine.

After of course doing my due diligence, which I did already for the most part.

I'm a first time investor. I have the opportunity to get into a lease option for a property that I'd ultimately like to buy & hold, but I'm trying to figure out the rehab financing. It's a distressed duplex going for about 58K. I've estimated ARV to be about 150K. I can pay for the downpayment via my savings, but the property appears to need a full rehab for both units. I say "appears" because I haven't viewed the property yet (but will this weekend). I'm just trying to think about all my options in advance. (I would also pay for the monthly rent via my savings/day job – in speaking with the owner, he said it would be a minimal amount because the property needs work).

I don't know exact numbers on what the rehab will be, but I've been doing some research on the costs and am working from an average at the moment, as I look up what basic rehabs for kitchens, bathrooms, electrical, plumbing, new roof, etc. could be. The best thing will be to get an inspector to inform me of everything that needs to be done, then get my estimates.

I'm already pre-approved for a mortgage with a bank, but want to use that as my very last resort bc they're strict with who you can use to do the rehab once you're under a 203K loan.

My finance options include:

• Using 0% CCs for the rehab. I only wanted to use CCs if the rehab is around 40K or less. I have good credit with a very low credit utilization at the moment, and I don't really want to jeopardize it too much. I know I could pay for work as it gets done, but I'd want all work completed within a 4-5 month time frame to get it rented out and start generating income to pay off the CCs. I know I could roll over to other 0% CCs as necessary bc it's a strategy I implement now for myself personally. I've never used it with that much money though. By the time the option to purchase rolls around, I wouldn't mind putting a mortgage on it at that point.

• Negotiate a lower purchase price, since it is a distressed property in need of some work and purchase the property now via HML (incl funds to rehab the property). I just don't know if it's worth it because a mortgage would provide me with lower rates. And I also don't know what the best way to repay an HML would be. What would that be?!

• I could also do it as a fix & flip, but that honestly hasn't been my focus. I wouldn't mind doing the HML for that option, and lining up other exit strategies just in case.

For those of you with a bit more experience than me, what options would you suggest?

I appreciate your time and input :)

I'm a first time investor. I have the opportunity to get into a lease option for a property that I'd ultimately like to buy & hold, but I'm trying to figure out the rehab financing. It's a distressed duplex going for about 58K.  I've estimated ARV to be about 150K.  I can pay for the downpayment via my savings, but the property appears to need a full rehab for both units.  I say "appears" because I haven't viewed the property yet (but will this weekend). I'm just trying to think about all my options in advance.  (I would also pay for the monthly rent via my savings/day job – in speaking with the owner, he said it would be a minimal amount because the property needs work).

I don't know exact numbers on what the rehab will be, but I've been doing some research on the costs and am working from an average at the moment, as I look up what basic rehabs for kitchens, bathrooms, electrical, plumbing, new roof, etc. could be. The best thing will be to get an inspector to inform me of everything that needs to be done, then get my estimates.

I'm already pre-approved for a mortgage with a bank, but want to use that as my very last resort bc they're strict with who you can use to do the rehab once you're under a 203K loan.  

My finance options include:

• Using 0% CCs for the rehab. I only wanted to use CCs if the rehab is around 40K or less. I have good credit with a very low credit utilization at the moment, and I don't really want to jeopardize it too much. I know I could pay for work as it gets done, but I'd want all work completed within a 4-5 month time frame to get it rented out and start generating income to pay off the CCs. I know I could roll over to other 0% CCs as necessary bc it's a strategy I implement now for myself personally. I've never used it with that much money though.  By the time the option to purchase rolls around, I wouldn't mind putting a mortgage on it at that point.

• Negotiate a lower purchase price, since it is a distressed property in need of some work and purchase the property now via HML (incl funds to rehab the property). I just don't know if it's worth it because a mortgage would provide me with lower rates. And I also don't know what the best way to repay an HML would be. What would that be?!

• I could also do it as a fix & flip, but that honestly hasn't been my focus. I wouldn't mind doing the HML for that option, and lining up other exit strategies just in case.

For those of you with a bit more experience than me, what options would you suggest?

I appreciate your time and input :)

Yes - I have been heeding that advice and taking my time actually.  After viewing responses from this post, I realize that I definitely do need to get my finances together first, so that's what I've been working on as I take time to check out the various cities.

Yup, BK is definitely expensive - the only things that fall into my price range are short sales, and those take sooooo long.  I still inquire though, as you never know what the outcome could be.

But, I'm definitely going to continue attending meetups.  I see there's one hosted by Sarah regarding Newburgh at the end of the month, so I'll definitely head out to that one.  

I didn't visit any businesses during my trip to Newburgh, only the comps I pulled.  But, I'm going to keep Newburgh on my radar, and visit again in the coming months.

@Kevin Schaefer, the taxes in LI are crazy high.  If I can get a deal that'll incorporate it and it'll work in my favor than maybe.  But, I took one look at those taxes and said whoa - no thank you!  Have you invested in LI before though?

@Levi T., yes I'm definitely going to reset and begin to analyze more deals.

@Anthony Angotti, I am the QUEEN of overanalyzing smh - it's CRAZY!!  I do it for wayyyyy too many things, but am getting better.  That's why I told myself I should just post to get out of my own way.  And I'm glad I did - it's been a great help and relief honestly.

I didn't think to ask local agents about neighborhood reports actually!  Thanks for that tip.  I see you're in Pittsburgh...hopefully, I can reach out to you if I do decide to head into that city.

@Ali Boone - thanks!  I saw your name and said wait a second, this name looks familiar!! LOL I realize I follow you on Twitter and have been on your site.

Yup, everyone's responses is making me realize I'm doing things a bit backwards, and even in researching LLCs further and going deeper, I realize it's not as easy as I initially thought it would be.  So, I'm glad I posed the question.  It's definitely opened my eyes!  So you're absolutely right, I'm going to start to analyze more.

@Todd Dexheimer - thanks!  I listen to the podcast on my drive home from work, so I'll be sure to tune in to your BP podcast episode this week, and also check out your blog!

@Stephen Kunen - very nice! Yes, 2 hours isn't far at all.  I'm sure you're further along than me in your journey, so I'll be following along to see how it works out!

Thank you so much for your input!

@Jordan Moorhead, yup you're absolutely right.  Brooklyn is definitely expensive!  I didn't really care to househack honestly, but if I do come across something that works financially, I'm definitely going to attempt to put that into play.  The only doable homes I've seen so far in BK are short sales, and I don't really think I want to go that route just yet.  

Hmmmm ok - I appreciate the reality check @Rob Beardsley @Brian Adzadi.  Yes, like you mentioned Rob, the funds will not completely come from a bank.  I wanted to utilize banks as a last resort, if possible, and try to use other creative strategies before going to the banks.  But, I understand that I should figure out the capital situation first.  I am working a bit out of order I guess.

Thank you for that!