Bank Foreclosure
I am a first time investor and need advice on a property I would like to buy. It needs $10000 worth of work and I want to know if in Georgia you can refinance or pull cash out after closing to do the repairs. I heard you can't but it doesn't sound right because there is about $30000 equity int he property.
Far as I know, refinancing "to pull out equity" is legal everywhere, it's what's been driving much of the economy the past few years. But any refi involves appraisals, so you'd better make sure the equity is real and not hypothetical; the latter would really put a damper on things. And it can be harder to refi the equity out of an investment property, as opposed to your own residence, for obvious reasons.
How're you going to get the property in your name in the first place? To refinance, you gotta be able to buy it at below 80% of ARV, because any higher and you gotta pay PMI, on a conventional loan. Are you talking about this as an investment, or principal residence? Makes a difference... I've done a cash back refinance before when I bought'em at 65%, rehab'ed them, and refinanced at 80%, people do that constantely here.
yes it is an investment. I want to bid 55k and they say its work 78K. It a bank foreclosure and I was told that in Ga. the laws are to where you can't get an appar. unless you have done the rehad to the property. Well I need the money to fix it up . But I am being told that a bank won't give you cash back.
Is that true?
Thanks
Sounds like there are several ways to play this one. Have you considered a lease option on the property?
Another way to go would be to bring in an investor for the money needed to do the repairs. Are you going to flip it or hold it? If you're flipping it try an ad in paper offering a good rate of return and don't get greedy on your profits. It's more important early on to try to find someone with cash to invest with and develope a track record with them for future deals. If the deals are good you'll find someone interested in making money with you.
Good Luck!