Is This A Deal And Need Financing Advice
This is my 1st time purchasing an investment property in Philadelphia. The property is listed for 58,900, but need about 15K in repairs, comps in the area are going for 70K, i plan to offer 40K, which i think will be accept. I am cash poor but equity rich. I prequalified for a mortgage of up to 80K and also for a equity line. I want to save my cash on hand for the repairs, and not have to use it for a down payment. Is this the right way to go? I definitely can't rent the place until the repairs are done. Can you please advise. Thanks
If you have a qualification for a equity line, perhaps you should talk to a locally owned bank about a "construction loan". Also many Credit unions are now offering these products. You can explain to the bank that you have a well thought out plan for completing the remodel (you will by the time they meet with you, right???); and they should be willing to give you whatever money you need to take ownership plus set up a draw account for you to access money to complete the work (they will allow draws on the fix-up money).
Remember, any property you buy should be able to support itself - you are probably rescuing it fom a wrecking ball.