Am i Over my head?? - Posted by Jason_VA

Posted by Bud Branstetter on March 18, 2000 at 15:15:07:

You will probably need to fix up the place to code. That means inspection by city inspectors. Wiring may have to be replaced and a permit by a master electrician is needed. Same thing for plumbing. Heat melts those plastic pipes.

Get estimates from experienced general contractors. If with them doing the work it is still sensible then negotiate what work you can do.

Am i Over my head?? - Posted by Jason_VA

Posted by Jason_VA on March 18, 2000 at 09:05:55:

Heres the beef folks.
2000 sqr foot house, was a duplex, suffered fire damamge a little while ago. Most damage was actually caused by the firemen. i.e no longer have walls where walls were, broken windows etc. Seller will take finaincing, i can get land and house for 20k. I figure ill need about 20k to make this junk livable, and lots of weekends. Comps are selling for about 70k for a house that size. Im a young guy, but little experience with building houses :wink: But i can learn drywall.
this house is a classic fixxer upper from hell. Can i use a hard money lender for the funds? since the ltv is so low?
Basically, my question is:
How do i get the holding and fix up funds?
Thanks all!!

Not if you do your homework. - Posted by Rolfe K Mpls/StP

Posted by Rolfe K Mpls/StP on March 18, 2000 at 15:30:03:


Having done similar renovations, I am familiar with fired up fixers.

First, about the renovation itself. Time is a critcal element here - you’ll want to complete the renovation promptly. Extra time takes extra money and energy. Ask yourself if you are really confident about such a process. Do you have the guns (capacity) you think you need? Certainly, these projects are doable. But a fire renovation is not for everybody, especially if you have a seperate full time job. Listen to your head, your heart, and your gut. Perhaps seek some advice from a local builder. Then, if you believe you can do it, you probably can.

Second, financing. You’ll uncover several options at this site. Here’s a traditional one. Construction lenders, accustomed to lending $ to new home builders, sometimes will lend $ for rehabs. Ask around, and see if you can locate such a lender. The construction lender will want a sale (you may be able to pre-sell)or a permenant mortgage (you may opt to keep the property as a rental) at the end of the project. You’ll have to write up a scope of work, have an “as will be” appraisal done, and satisfy a host of other lender requirements.

Finally, consider holding the home as a rental. I have sold renovations, and held renovations for rentals. With the L/V you mention, a refinance mortgage at the end of the project would probably cover most if not all of your costs. Sure, you might make $20k at the end of the project. You’ll have an opportunity to make a lot more than that if you hold on to the property.

Good Luck; Rolfe