Finding cash for renovations

[Nina Diehl]

Hello, everyone,
It’s the night before closing on our first investment property. I’m freaking out a bit over how to pay for needed work and renovations to the property before we can put it on the rental market. I miscalculated the amount due at close (I estimated 4% closing costs on the amount loaned, but I am paying 4% closing costs on the price of the house). Now I’m nervous about having enough cash reserves for these repairs. 

I’m considering a few options:

1) pulling money from my pension or 403bs knowing they will be taxed at 10%
2) paying for only the most necessary repairs and putting the house on the market

Any thoughts?

[Drago Stanimirovic]

Hey Nina,

First take a deep breath. This kind of last-minute stress is super common before your first closing. You’ve got options.

Avoid pulling from your 403b or pension if you can, it’s costly with penalties and taxes. Instead, focus on getting the property rent-ready with just the essentials first. You can always tackle cosmetic or non-urgent upgrades later, once rental income starts coming in.

Another route is looking into short-term renovation financing, like a fix & hold loan or even a small gap funding.

If you want to explore those quickly before closing or right after, I’m happy to help.