How to analyze property before committing to buy permanent home

Question

I have a large down payment. I don't want to blindly jump into a home like I did the first two times. It wasn't bad but I need to afford this home forever.  I am open to a down size i.e two bedroom home 1 bath. Something with a small remodel. Since I am not renting the home in the near future. I am unsure if using the BRRRR method or any of the other methods can still apply for analyzing a property. I am also thinking about trying for a 203k loan. I am also open to buying from a wholesaler with cash and taking out a remodel loan if I can qualify. Any advice or ideas?

Jaron Walling · Answer

@Enedina Barrera  This could be the most ideas ever packed into one paragraph.

I'd slow down and consider what's most important to you. Have you ever remodeled property and to what extent? If you're aiming for a BRRRR you shouldn't burn all your cash for the DP. Instead find a distressed opportunity that qualifies for a conventional loan and use the rest to fix up the place. 203k loans come with a lot of headaches. Do research yourself if you don't agree. It slows the rehab process and some lenders lock you into using provided contractors. No thanks! Without making cash offers you eliminate the majority of the wholesaler transactions. I guess it depends on how much down sizing you want to do.

The good news is right now is a great time to buy. The markets have slowed (recession?/fall pull back), sellers are nervous, and prices are reducing. Take advantage.

Austen Mueller · Answer

Sounds like your interested in buying a fixer upper with hardmoney and refi into a conventional mortgage for a home you will be living in? In which case just I would run the numbers as a BRRRR without any rental income.  HELOC may be a good way to go for you as well.

If your going to live there. I assume you have your target market boiled down to just a handful of places. If there are not many deals in this area and your looking for affordability. I would consider putting that large down payment into a conventional mortgage and trying to paydown as many points as possible.