All Forum Posts by: Maggie Mendoza

Hello everyone! I have two options and I need to know which one is the best.

I have my eye on two duplexes that the owner is selling as a package deal for $120,000 that are appraised for $160,500. Great deal huh? Anyway, I need help with deciding if I should do conventional or use a HML for this deal. Here are the specs:

HML:

purchase price: $60,000

10% down

rehab est: $7,000 ( We have to figure in rehab to get the loan amount up since they only finance 90% of the purchase price and the loan amounts start at $60,000)

Total Project Cost: $67,000 (purchase and rehab)

down payment: $6,700

origination & closing costs: $4,000

escrows/prepaids est.: ~$2,300

Total est. cash to close:~$13,000

monthly interest: $552 ( 10.99% APR for 12 months and interest only payments)

The total cash to close for both deals is around $26,000

CONVENTIONAL: 20% down to close, 4.75% interest rate, 30 year 

I would want to do a cash out refinance with both properties eventually anyway, so which one should I go with? I'm really not liking the $4000 origination fee and closing costs on each property. That's $8000 just in origination fees and closing!

Any thoughts? I appreciate any help you can offer.