Should I buy this property now or wait?

[JP Desmet]

Hello all,

I currently have the opportunity to purchase my mother's home with significant equity in the home. Essentially paying $120,000 for a home that has an ARV of around 240-250k. I will be living in the house for the next 6months to a year. The house needs foundation repairs, a new roof, new fence, and cosmetic repairs such as paint and new floors for the 2nd floor and stairs. I hope this will cost around 20-30k.

I am currently working part time during my last semester of college earning roughly $2400 gross a month. I am eligible to obtain a renovation loan for around $165,000 and am looking to have the purchase price of $120,000. I would have to essentially put all of the cash I have saved up as the down payment and my mother would pay closing costs for an FHA loan. I would then have an interest rate of 3.5% and a payment of around $1400/mo and $30,000 left in the loan to do rehab. I would essentially be living paycheck to paycheck these next few months while this rehab takes place until I move out of the house later this year.

Upon move out, I plan on putting in a tenant and doing a cash out refinance later this year. Would it be better to proceed with this situation and start my Real estate investing now or wait until I graduate and will be working full time and will be eligible to obtain a larger loan?

If I wait till I'm full time I will be able to purchase the home for around $200,000-$220,000 and my mother would give me $80,000-$100,000 to use to do the rehab and I would invest with the rest. Would this be the better option rather than purchasing now and doing the cash out refinance with the ARV?