First Time Advice?
Here's the deal.. I just graduated college in the spring, and have decided I want to take a risk on something different while I've got the time and I'm looking for a job.
I've got about $20k in the bank at the moment, and good credit, although no current employment. I've also got a pretty good background in diy construction from years of working on my parent's place growing up.
What I'd like to do is buy a distressed property that I can fix up for $10k-$15k while I live in it, then turn around and resell it or refinance in 4-6 months and rent it out. I'd do the renovation full time, and do most of the work myself, bringing in subs for some of the detail work.
Is this doable, and more importantly, what's the best way to finance the property itself to start with? I can front the renovation expenses and support myself, but I'm wondering how hard it'll be to take a mortgage if the property itself is my job.
And lastly, can anyone recommend a couple of good books to start with? There's a ton of them out there and I'm not sure which ones to start with.
Can be done you will need to find an insurable house to rehab. Put as little down as possable If the seller bumps your first low offer get closing costs in the deal. Even with "sweat Equity" log your hours to see if it is worthwile Keeping some handle on how far to go. Stay two years and keep your 30% income tax. [ Edited by DavidBrowne on Date 08/29/2003 ]
Hello Jsunday,
Yes this is a doable task. If you get a licence as a general contractor, you will be able to get the construction loans for the repair cost and the purchase of the prop. Or you will have to at least have a gc that will claim to proved the insurance on the job.
On my two rehab projects, I put nothing down to close. I paid 450 for the appraisal and credit check. I put up 500 good faith ( which was credited toward loan). Once the construction is completed I will place primanant finanicing on the project. I will use the quity to increase as my 20% down payment. I now have a prop with a good positive cash flow and 450 out of pocket. Rehabs are the way to go if you have an eye for locating under valued props.
Your local city offices may have programs to assist you with getting money for the home. Especially since you'll be owner occupying it.
The only problem I see is your unemployed, but not necessarily. You may have to get something - anything for the time to get the funding if that is the way you want to go.
Go down - dont call - waste of time to call, and check with the city (each has a housing office or go to the local HUD office) and see what programs they have for homeowners buying and fixing up distressed properties in the city limits and what areas they offer these in. They often have sections of the city they offer special incentives, called targeted or grant bond areas. You may even be able to get grants or forgiven loans to rehab a home. They will give your the info on requirements you will need to meet to meet their criteria, if you are not making much money this can be the real plus.
Good luck.