Hey there everyone, just a few questions to see if this is for me or not. I am currently a Junior in college majoring in accounting. I have just bought a HUD house for personal use. I am very interested in obtaining a house to rehab. I am pretty handy, but cannot do everything, and I am pretty short on cash, but I have great credit. So my questions are,
About how much cash does one need to get started?
I know it depends on the house, but typically, How much does it cost in repairs for a 20 - 45k house?
Just starting out did you all pay for repairs w/ cash or through credit.
Sorry for the dumb questions, but I just want to make sure that I have all my ducks in a row before commit to anything. Thanks for all the help.
Idealy you should try and find someone to mentor you. The first good thing that you did was buy a home for yourself. You should look at the house you just bought and ask yourself this question. What can I do to improve the value of this house? If it is a HUD house you should have been able to buy it at least 20% below regular value. The next thing I would do is get a roomate (college buddy or two) into the house to make your payments.
You need to know how much equity you can add to the home with the least amount of money. Example how much will it cost to paint inside or out or maybe you already done that? Look at the flooring and possibly put in new flooring or if your lucky it has hard wood under old ugly carpet. Pull the carpet out and refinish it yourself for about $500. Check the lighting in the house and update if needed, this shouldn’t cost much more that $500. The big thing I am trying to push is you need to learn how to estimate some of the simpler repairs that you can do yourself. Lamanite flooring is easy to install if you don’t have to pay$3 to $5 a square foot.
Once you have some understanding of the costs you should be able to proceed with getting a HELC to purchase your next project. I can not also stress enough that you need to know your market!!! Go to open houses around your area to get a good understanding.
I am in Indiana. The house that I bought, I already have about 30k in equity on. I have completely redone floors, and all painting as well and some landscaping here soon. Is an HELC a home equity line of credit. Just want to make sure we are on the same page. THanks for the reply
Yes, I forgot the “O” thanks! You are off to a good start talk to some lenders here on line and see what they can do for you if you have a good credit you should be in great shape. good Job!
Some cities and towns offer home improvement grants that are interest and payment free until the property is rented out or sold. Most of these grants work on a reimbursement basis. Home Depot offers no payment /interest for 6 months on purchases over $300. Buy what you need to, use the credit to repair(within grant guidelines, usually structural) and then the grant reimbursement should pay you for your Home Depot bill. I’m in process of trying this myself. Sounds resonable.
I’ve been looking into the Lowe’s Project card. It looks EXTREMELY attractive for rehabbers like us.
First purchase must be at least $1000 (sure thing!) to open a “project window,” then all purchases under the card are interest free for 6 months, then once the window closes, it’s rolled into effectively a 10-year level payment loan.
Good Luck!