BRRR? FLIP? HOLD? HOW TO FINANCE IT

[Edward Eloma]

i need help for a fellow friend.. we are working with a house that is for a sale price for 120,000. the house is a single family home in a good area of massachusetts. we have 160,000 but want to make the right step in this process and need advice on how to go about it or if its smart to finance it. FHA 203k or Conventional or cash buy it. we were hoping to get the house for 100,000 and rehab some of the house for 50k. but we are running into worries about covering the cost of the septic and well.. and weather or not to BRRRR it or sell it off. my guess is the property could sell for between 260,000-300,000 tops.needs new kitchen gut, 1 bathroom gut, new plumbing throughout, and heating system and new windows and electrical upgrade.whats the best way to go about this

[Caleb Brown]

All are good options. If you use Cash the break down would be 100K PP + 50K rehab+ = 150K all in(In the perfect scenario). If you held and BRRR'd 250K appraisal x 70 LTV. You'd be able to pull out 175K which would cover everything and leave no money in it(If everything went right). If you flipped at 150K all in for 250K profit after expenses would be 62.5K. FHA 203K and Conventional loans would depend on the details.

A few things what's the rent in the area? Have you verified rehab with GC, with it needing everything rehab I can see being higher. What's your goal in REI? Is 100K purchase realistic, I can see it going 120K or higher with the numbers you mentioned. Do you guys have any experience with large rehabs? You want to make sure you have a good exit strategy just in case. Also you want to be conservative in your numbers. Your goals in REI will dictate which direction to go.