NEED HELP with first rehab - Posted by Andrew-VA

Posted by Ben in Ohio on May 03, 2000 at 13:31:02:

This might work.

Have seller agree to a 120 day (or longer) closing. Small earnest money, $10. This gives you 4 months to find a buyer. In the meantime, spend the $2 or $3K to do the repairs. While work is in progress, advertise the property for sale. Just make sure you have a back up plan if you can’t find a buyer. Your backup plan might be a lender willing to give you a loan to complete the sale.

NEED HELP with first rehab - Posted by Andrew-VA

Posted by Andrew-VA on May 03, 2000 at 10:31:01:

I am posting this message again becuase I need some help fast and I did not get any responses last time.

Here’s my situation.

I am about to purchace a house for 20k. My father, who is an experienced contractor estimates the repairs to be 2k - 3k at the most. After looking at comparable sales, my judgement is that it will then be worth 35k-40k.

I’m trying to figure out the best way to purchace it no money down or at least get my down payment back quickly. The seller owns it free and clear but does not want to do owner financing. But with such a small amount I could get a cash advance from my credit card to pay the down payment.

But here is my question. Should I:

#1. Put 4k down and obtain a 16k mortgage from the bank, fix it up, and then refinance again? Or

#2. Could I tell the seller that I’ll give them 4k at closing, and the remaining 16k a month later (alowing time to fix up and get financing).

The second option would save me at least $600 dollars for having to refinance, but would the seller go for this or will the bank?

My next question is how should I then sell it to receive the quickest return? It takes about 60-90 days to sell a house here by a realtor and they charge 7% commission. If I sold by L/O, then I would only be able to get $300 - $350/month (rents are very low here). And if I sold it, seller financing, I know I could sell it quicker, but how would I do it to receive the best cash flow?

Any help you guys could give me would be greatly appreciated.