We started in real estate as wholesalers. We haven’t really “closed” a deal and been paid our fee. We cancelled the first deal because the repairs on the house were going to be more than expected, and it wasn’t as good of a deal as we thought after speaking with other investors.
We found a property in a wonderful “we care” family neighborhood. The streets in the area are beautiful. The seller purchased the property at a tax lien sale. The owners moved out of state. The house needs updating and a lot of cosmetic work. The house is a traditional cape cod style home built in the 50’s with 3br/1ba and 1600 sq ft and a full basement underneath. The house is structurally sound with no electric or plumbing issues. We walked through the house with a contractor to get some estimates.
The lowest the seller is willing to go is 45k. The house comps for 100K+. If we do some updating the home by adding a master suite in the attic (contractor suggested it), we could add value to the home. It would still be 3BR because we need to take out a BR downstairs to make room for the stairs to upstairs and turning it into a parlor; then opening up a wall to LR to open the space up. So the numbers as we have them are
Profit $25k -holding costs/profit
We have never done a flip/rehab before, we need some guidance. We are reluctant to do it but we don’t know how to fund the project. HML? If so how do we go about it?