Let me explain a little of this situation, and please give me feedback.
There is a 6 unit building with a price tag of a 2 family home.
They also want to reduce the population. and put a law for non-conforming homes.
This is my question. There is a 6 unit, which the county wants to reduce to a 3 unit and is willing to pay $75,000 to make it happen. The building is in pretty bad shape but nothing major.[due diligence not done]
In which case I would have to purchase the building then, apply for this program, then wait to get the $75,000 then try to sell it after repairs.
Sounds like a great deal. Get it under contract subject to the renovation grand being approved and ready to close. That way you will not have to own it while you are waiting for the grant and you can let the seller carry that costs.
1 more question, once I convert it to 3 units, the property values in the area are not that great. I will almost break even if that.
however, The 75,000 grant might not be used completely and I can come out with a good chunk of cash.
how else can I word the contract so that I can check with contractors on pricing for converting etc…
Our contracts in Texas have a option period where you can do all the investigations you want and back at if necessary for a fraction of the earnest money deposited for no reason.
Check the terms of the grant. The ones i used to get had to be used on the project or not funded. You can add some serious overhead if you need. Think of the $600 govt toilet seats.
can you get financing as a residential (4 units or less ) because it will become a 3 unit? or do you have to do commercial financing because it is currently a 6 unit?
Do not tell anyone else. I actually did a 5 plex once and called the 5th unit storage. If the units are vacant before you close you should be able to get residential financing I would think. This is just a guess as I am not an underwriter. Even your loan broker will have to ask the underwriter. Any underwriters on the forum?