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Started By
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renovations on rental property and loans
Posted on 4/11/12 at 4:29 pm
Posted on 4/11/12 at 4:29 pm
short and sweet:
Opportunity to buy three duplexes and renovate them and then rent them out. I would want to finance the property and have a construction loan to do my renovations. Property is selling at 40% of appraised value before demo and renovations.
This would be done with two other family members and we would form an LLC.
Debt to income is no problem, over $250,000 in combined income, two of three have strong credit scores, third score is at 620.
What are options to get into this while staying as liquid as possible. Say total cost of all three properties is $75,000.00 and looking at $20,000 in renovations on each one.
Thanks for the help!
Opportunity to buy three duplexes and renovate them and then rent them out. I would want to finance the property and have a construction loan to do my renovations. Property is selling at 40% of appraised value before demo and renovations.
This would be done with two other family members and we would form an LLC.
Debt to income is no problem, over $250,000 in combined income, two of three have strong credit scores, third score is at 620.
What are options to get into this while staying as liquid as possible. Say total cost of all three properties is $75,000.00 and looking at $20,000 in renovations on each one.
Thanks for the help!
3
Posted on 4/12/12 at 7:17 am to JoseVargasTX
bump--advice please!
Posted on 4/12/12 at 8:33 am to JoseVargasTX
Honestly this doesn't sound like a good idea at the current proposal. And that is because of a major, glaring issue.
If you can't do this with cash then why do it? Logic: If you have the cash to swing this, then do that. If you don't have said cash then you don't have the security to handle the risk. With the income you stated, coming up with that shouldn't be a problem.
And again, if you are worried about staying liquid, why go borrow money to invest in real estate?
With all due respect, I get the idea you are going to do this either way as you have made up your mind and need someone to support the decision.
Oh and never mind the idea of getting into a partnership with family that involves a debt. There just seems so many ways this can go wrong without eliminating the risks. I think doing this with cash could eliminate a lot of problems.
quote:
I would want to finance the property and have a construction loan to do my renovations.
If you can't do this with cash then why do it? Logic: If you have the cash to swing this, then do that. If you don't have said cash then you don't have the security to handle the risk. With the income you stated, coming up with that shouldn't be a problem.
quote:
What are options to get into this while staying as liquid as possible.
And again, if you are worried about staying liquid, why go borrow money to invest in real estate?
With all due respect, I get the idea you are going to do this either way as you have made up your mind and need someone to support the decision.
Oh and never mind the idea of getting into a partnership with family that involves a debt. There just seems so many ways this can go wrong without eliminating the risks. I think doing this with cash could eliminate a lot of problems.
Posted on 4/12/12 at 11:24 am to JoseVargasTX
you are not going to get a conventional loan to finance the propertys and fix them up. this is going to take a home bank loan. in other words good luck. i work for a conventional lender and to buy investment property's we require a 660 credit score 25% down and 12 months worth of reserves and the property cannot have repairs that need to be made. so you best bet is a local bank and the interest rate and terms will not be as good as a conventional lender.
Posted on 4/12/12 at 2:09 pm to hawkeye007
Thanks for the advice--have a local bank who gave us a loan on one property already and we have flipped that property.
Same bank is ready to do business with us again--they want 30% down plus first year's insurance on the three properties. They are willing to do $80,000.00 on top of our offer for construction costs.
Properties will appraise for double what we're buying them and putting into them when we're finished. Any thoughts on whether I can get this done with less than 30% down?
Same bank is ready to do business with us again--they want 30% down plus first year's insurance on the three properties. They are willing to do $80,000.00 on top of our offer for construction costs.
Properties will appraise for double what we're buying them and putting into them when we're finished. Any thoughts on whether I can get this done with less than 30% down?
Posted on 4/12/12 at 2:23 pm to JoseVargasTX
quote:
I would want to finance the property and have a construction loan to do my renovations.
Posted on 4/12/12 at 3:13 pm to JoseVargasTX
the 30% down deal seems like a great deal considering you would have to put down 25% to go conventional.
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