Hi all. I’m new RE investor looking to purchase my first rehab property in a month or two. I posted a few weeks back about financing the deal, and have found a great broker/lender and program(s) that I’m comfortable with since then. I’ve found a great RE agent I’ll be working with too. Problem is, I just hope I can pull the trigger when the moment comes.
On paper I’ve got no reason to worry. I’m a construction proj. manager, I’ll be doing the rehab with our company guys, I know construction and the $ involved, I’ve lived in the area all my life, and now that the market has stabilized, I think I’ve got a handle on property values.
Thing is, I hear/see so much about RE sales slowing down, I’m concerned I’ll finish the rehab and end not being able to sell, having to hold the prop. for months (6 or more) on end. My backup plan is to hold it as a rental, but I’m not interested in being a landlord just yet. My exit strategy is to sell at a min. 10% profit after fees and holding costs and before income taxes.
yes, and it u r going to worry like that, don’t get into this business. there is always going to be a property that takes longer to sell than another. and there is always gonna be a white elephant, no matter what anyone tells u so be prepared. have enuff funds to cover it if it doesn’t sell. u may want to think twice about relisiting it with an agent to sell. owner finance it or do a L/O or CFD, u will make more cash. y pay a realtor a commision on something u can sell urself and pocket more money? good luck to u !
No, you’re not worrying too much. If you’ve done the work and buy at a large discount to market - you should be fine. If you don’t understand the market and pay too much or underestimate the cost of the rehab, you could take a big loss.
That’s what business is all about. Calculated risk.
thnx for the reply. I’ve got enough reserves to finance with 10% dn and make about 12 months of payments. I’m using a Home Eq. LOC for the renovation costs, and can make payments in the increased line amount. So, I can carry the prop if it doesn’t sell right away. I guess I gotta just do it.
I’m in the same boat as you. I have construction experience and financing as well, but am still hunting for that first place to pull the trigger and buy. I’m nervous as well, but feel that if you buy right and know your market we can succeed. Jeff