I found a nice house in a nice neiborhood its a friend of mine grandmothers house. There is 85k left on the mortgage. The comps in the area are between 185-212k retail. The house could use some updating but its completely livable now…The heat works all plumbing is tight … Its a detached single famly home 3 level…3brm… with a second kitchen on the second level that can be converted to another bedroom There are two full baths and a half bath in the basement. But as a new investor I am looking for a way that I can partner with an investor to aquire the property fix it up…And continue to live in it after repairs but also compensate myself and my investor…It could use about 20 k in updates …I would appreciate any help.
You described a house, but where’s the “sweet deal”? It looks to me like you have no idea whether or not you can buy the house below market value.
As for looking for a way to partner with an investor. Just get the house under contract for $100k and you’ll have investors coming out of your ears.
Like Doug said, How much are you going to pay for the home?? Why do you need another investor for this deal?? you can always get a GC to do the work while you live there…
Find out how much the seller is looking??? maybe she is willing to do an equity split with you???she takes less now and more later after you sell?? house has 2 kitchens??what about making it a duplex???
there is 85K left on the mortgage…and she wants 10k out of the deal for herself so she can move to nc
You can not compensate another investor since you do not want to sell the home after its done (at least it seems that way from your post) but at the same time your looking for the rehab funds it seems…
Ok, this is what you do… Go get a solid rehab estimate if you have not and add 15% to that figure…So lets say $20K is the rehab, add another $3K to the rehab cost since cost usually goes 15% up and down on a rehab…
Now she wants only to walk away with 10K, so to determine your sale price, its $85K+10K+23K=118K…
Now since house will comp out for 175K at least you will have a strong equity position. You can probably use a HML and get the money to pay it all off, get rehab funds and close in 1 week but will pay in the interest rate and just refi the property in 6 months…or do what I do for my rehabs…
Create a contract where in the sale contract you will have a seperate addedumn that the mortgage broker or bank will never see, only the buyer, seller and escrow agent in which at close she will give you the $23K back (actually the agent will cut that check to you) Now you can always ask for me, maybe you want to do alittle more in the rehab or take some carrying cost, so maybe you want to get another 15K back, just raise the numbers.
COntract out the rehab work and just pay your mortgage as is…
Now your only obstacle will be the seller worrying about taxes… Tell her not to worry, especially if shes been living in the house for over 2yr yr, it seems by figures shes been there along time…so captial gains will not affect her at all in my opinion
if you dont want to have to deal with the rehab, you could always quick flip it with an option. especially if you get the exclusive option to buy it for 100000, then flip it to an investor for 175000. then you get a 75000$ profit.
emerican
yrush how do you get by with that addendum? In order for the lender to cut a check for this, something would have to be disclosed on the HUD correct? What line item do you use and what do you call it? I assume you are talking about increasing the purchase price and having the title company cut you a check at closing?