financing a flip as an owner

I would like to buy a house I can live-in fix and flip. Whats the best way to financing it and use none or very little of my money.


100% financing would be the best way to go. If you are going to live in it you have tons of options. Do an 80-20 with seller paying 6 % of closing costs. You might also negotiate the seller putting some money into a ne flooring allowance or into an escrow account for repairs.

How long do you plan to live in it?

Depending on all the factors (credit, income, cost of improvements, etc) you may want to consider a Fannie Mae Homestyle Renovation loan. This loan allows you to finance 95% of the purchase price and 95% of the cost of improvements in one loan at competitive conforming rates.

So, if qualification is not an issue, you may want to pin your decision to the cost of repairs. If they are ‘minimal’ and you have money available, consider the 100% financing with seller paid costs, but if they are dramatic, financing 95% of the purchase and 95% of the improvements may be a better way to go.

I plan on living in the house less then a year. I just want to buy live fix and sell.



Since you want to be in the house for a year it is very important to make sure you have no pre-pay on your note. I would have to agree with Dave; if the property you buy needs drastic repairs go with a rehab loan, but if your just going to do basic stuff then 100% CLTV loan is the way to go. as I said before you can ask the seller to pay you an allowance to do some repairs. Just negotiate it into the sales price and put in the special provisions section of the purchase contract.

You should try and live in it for two years so you take advantage of the Tax Free Capital Gains on a primary residence. You should have the cash to reinvest in other properties. The other option is a 1031 exchange. I am not a CPA but their are sever here on the board that will confirm this.

Good Luck!