Rehab Questions
I've got a property (deed in hand) that is worth 130K in good shape. Needs about 12-15 K to get it there.
The house is 3/2 and needs:
Contractor says I should "skim coat and retexture" the entire interior - 1,100
Paint inside - 1,400
Paint Exterior - 1,150
Floor board repair - 250
14 Windows - 1,750
Kitchen Cabs - 2,500 (How much for Mills Pride?)
Tile Work - 500
Carpet - 2,000
A/C - 2,100 (possibly repaired for cheaper)
2 new exterior doors - 350
14 interior doors (includes molding for the room the door gets you into)- 1,750
Front pillars repaired - 250
Rotten wood around a couple windows - 150
Add up a few misc. items and this thing comes to roughly 15K.
The property is in foreclosure and has a large amount of backpayments needed to reinstate the mortgage (18.5K) and a low payoff (52K) with a low payment (620/mo) I have an owner financed bullet due in 6 months for 6k.
I have about 20K in working capital currently. I have a 42K payday coming once I get a tenant out and market a property that the t/b was suppose to cash me out 6 months ago. This person is well aware that they need to vacate and the property is in a hot market and should sell quickly.
I contacted the bank today and let them know the situation. Asked them if they'd entertain a forbearance agreement and it sounds as if it is more trouble than it's probably worth. The loss mitt said that the borrower must have sufficient income to qualify. This person does not have enough income to live in a box comfortably.
Currently there is not a sales date set. Should I plunk my cash/credit into doing the fix up work and subsequently list it? All the while keeping my fingers crossed that it sells before the date and if it gets too close to comfort use cash from my other deal (also have access to other cash) to reinstate the mortgage just long enough to complete the sale?
Would it make sense to get hard money? Was told it is only 3 points up front and interest only loan payments @ 15%. This is a mid size hard money company that is a big supporter of our local REI club. I have the "loan application" upstairs in the office but haven't filled it out.
1st contractor (used him once for cabinetry work) says they can get it done in 1 week (4 guys)... and they'll charge 10,500 (not including carpet, kitchen, ext paint) and this is practically having a new house when everything is done. You could hear these guys giggling when they're telling me what needs to be replaced and how much it will cost...
Made me feel like I was being taken for a long ride up an expensive road...
2nd guys (never used them before) said they can have it done in 3 weeks tops (father and son) for 5,500 but this isn't as detailed as the first set of guys and does not include (carpet, kitchen cabs, ext paint, skim coating walls and texture (I don't think it's needed but would look good because there are at least 50 nails in each room but think with spackle and texture patching it would look ok), 5 doors vs 15 (painting brown doors white that are in good shape), repairing 3 windows that are broken vs replacing all of them, and a few other things...
[ Edited by saniche on Date 07/06/2004 ][ Edited by saniche on Date 07/06/2004 ]
Since you already have the deed what if you went to another lender and refinanced for $100,000. This is enough to take out the first and cover your rehab. But your still less than 70% LTV on the after rehab. value. With your working capital for a reserve that should be bankable.