5% Down on my next primary while still living in current primary?

Question

Hello again BiggerPockets!

I have a newb question. I'm currently living in a condo and will be selling soon. My next primary will need a lot of work as I am wanting to invest in the rehab of it through a HELOC on my condo - all the while still living in said condo as my primary while the rehabs get completed (sorry if that's redundant).

My question is, would a bank let me put 5% down on my next primary while still living in my current one? Would a bank work out a deal with a customer that says "hey, we'll let you pay 5% down as long as you sell your condo on completion of your next home's renovations"?

Make sense at all?

Thank you!!

Peter Kehr · Answer

Chris Mason Killer. Thanks again

Peter Kehr · Answer

Hey Chris Mason thanks for your response!  What does the chronology of this process typically look like? It sounds like I'd have to get pretty advanced with the seller before even contacting the lender?- Meet with seller, meet with GC, walk property, create renovation plan, THEN approach bank - am I looking at this wrong? It seems like by that time the good properties might be sold to someone else.

Thanks!

Chris Mason · Answer

Not quite. Get tight with a reno lender. Get preapproved for your total acquisition cost, which is purchase price + reno budget. Be conservative with that budget, so if you think it's $70k of work just assume it'll be $100k when looking a properties. When you find one, tie it up in contract with a 45 or 60 day close of escrow. The extra time is when you get your CG, get bids, get the actual plan going, etc.

Chris Mason · Answer

This is a FNMA HomeStyle scenario. Lender will need to see and approve the renovation plans, all work will need to be done by licensed contractors, and you have the option of paying cash or financing the renovation costs as you please.