Please Help - 1st Rehab
I usually don't do rehabs, but I have come across a deal that I cannot possible pass up, but I have cold feet. Here are the details:
Asking price $87,500
Tax Value $178,100
Last market sale in 2000 for $157,259
Repairs $25,000 +/- $5000
I originally looked at it to flip, but the contract is unassignable (any way around that?) Second, I would have to use Hard Money. Any advice, feedback, encouragement would be great.
Linda
sounds like a good deal if your numbers are right. Why are they selling it so cheap? I'm in the middle of my first rehab project right now and I am learning from experience something really important to remember... I thought I had all the numbers right but when it comes down to it always guess high! I'm not kidding, people have told me it usually costs double what you thought it was going to cost, I thought that was absurd. I thought my project was going to cost 15k but now 3 weeks into it I realize it's going to cost me 25-30k! Serious! Stuff just comes up so be careful. Just some advise I was given and didn't believe but now I'm a believer. Especially on your first project. Even at double the cost though the deal still looks really good, but the problem is finding the money. Hope this made some sense.
Andy
There are government programs that will give you the money to purchase and rehab the property if you agree to rent it out to low income persons. Once the rehab is complete, you then get a conventional loan. As long as the price and the cost of the rehab are 80% or below the appraised value then you can get in at no money out of pocket.
The key to managing your rehab cost is to make your work write up as detailed as possible. You will need to spell out what grade of material that will be used. To be honest it might be best if you hire an architect to complete the work write up, if you have never done one before. You can get an architect or developer type to come give you full details of all the items that you will need for a project of this type. It may cost $500 to $700 dollars but it my well be well worth the saving that you will get in return.
Vern,
Could you tell me what government programs are out there that would help rehad properties if you agree to rent it out to low incoome persons? I am interested, the only thing is that I see a property but they want owner financing. Please email me at rbaldwinassociates@usa.com. I need advice. You didn't have an email address on here for me to directly email you.
Quote:
On 2003-04-16 09:08, Vern wrote:
There are government programs that will give you the money to purchase and rehab the property if you agree to rent it out to low income persons. Once the rehab is complete, you then get a conventional loan. As long as the price and the cost of the rehab are 80% or below the appraised value then you can get in at no money out of pocket.
The key to managing your rehab cost is to make your work write up as detailed as possible. You will need to spell out what grade of material that will be used. To be honest it might be best if you hire an architect to complete the work write up, if you have never done one before. You can get an architect or developer type to come give you full details of all the items that you will need for a project of this type. It may cost $500 to $700 dollars but it my well be well worth the saving that you will get in return.
Could you please post that link on the site? I am also interested on the Goverment loans.
I live in Kentucky. I was just tickering around on the internet looking for government loan programs for community revitalization options. I made some calls, only to find that most programs were for nonprofit groups. I then phoned HUD, I told the counselor what I was wanting to do. She was aware of the fact that Kentucky Housing Cooperation (KHC) had a program that would fit my needs.
So I called the office and set up an appointment to meet with one of KHC field reps. That was all I had to do. My rehab project is currently underway. A true NO-MONEY-DOWN deal.
As a matter of fact I am looking at starting to process all over again with a new fourplex that I found on yesterday.
I am sure there must be programs in every state that offers such programs.
So Vern,
When you call your local HUD office what do you specifically ask for as far as this?
What if this owner wants owner financing? The property that I have seen is damaged as well and is a duplex.
Please reply back.
You have to apply for a construction loan. Construction loan are not the same as conventional mortgage finanicing.
The construction loan will cover the cost of the purchase and the cost of the rehab work. This is a short term loan.
So,
Do I contact the HUD office and ask for a construction loan?
Vern,
Okay, I contact the housing program in VA. But my question again is do I ask them about applying for the loan? This is where I am stuck since you have mentioned about it in this forum. I don't mean to seem like I am bugging anyone but you weren't too clear on sharing this info about how you went about getting HUD to help you rehab the property. I know where to go I just wanted you to tell me about the construction loan, do I contact HUD about the loan or do I have to contact someone else?
You also mentioned that you told them what you planned to do, could you also share what you told them so that I can mention the same info when I do get in contact with the program in VA?