Rolling Future Repairs Into The Purchase Price.
Has anyone done a deal as follows or have any comments or suggestions.
In this scenario, I purchase a property for 70k. It needs about 25k of repairs to make it rentable. However I don’t have the 25k. Lets also say that at a 150k purchase price the CAP rate is 12%. Can I flip it to an investor for 150k with a guarantee that I will make the repairs and any future repairs for one year? Also, For the buyer of the property how would a lender look at the 150k purchase price? Would they approve such a loan or accept such a guarantee in lieu of seasoning? Would they accept a guarantee backed by funds set aside in escrow?
Ideas?
Thanks!
Comments(0)