How Would You Do This Deal?
Im trying to figure out how i would go about this. Please help:
If you had a seller who agreed to sell a free and clear property for $107,000 if I gave him $30,000 down.
He’d carry $77,000 at 7% interest, or about $700 a month for 15 years.
It needed $20,000 in repairs and would resell for $169,500 with owner financing after it’s fixed up. [or $153,636 is the ARV]
Before closing & loan costs thats 26k in equity if you retail @ 100% of arv, & 43k if you L/O it
How I would go about getting a loan for repairs and downpayment only,
since the seller has agreed to have their note in a second position behind any loans i get for repairs & the down.
I've talked to 1 'hard $' company that said they loan on the purchase price & repairs up to 70% arv with 14% interest,
& they usually steer away from 2nd liens over 10K because if they foreclose the seller would loose their second lien.
& How would YOU do the deal
Any assistance given would be greatly appreciated>
Thanks
Try and negotiate a lower downpayment to cover the repairs. Then offer the property on a Lease Option.
Eric & Rosa
[addsig]
What will the property appraise for in its current condition?
What if the property will appraise for $125K? An 80% cash out refinance on this property for $100K gives you a monthly debt service of $600 (P&I) on a 6% 30-year fixed rate mortgage loan.
If you use this money to pay off your $77K note held by the seller, you have $23K left in your pocket for the repairs.