Financing Repairs Or Paying Out of Pocket

[Trevor Vancour]

Hello, 

I am currently in the process of closing my first rental property. It's a side by side duplex with 2 bedrooms & 1 bath per side. The overall condition of the property is relatively nice. It just needs a little love to get it running at its maximum potential. (Flooring, Paint, New Bath Tub etc..) After walking through the property with the current owner he told me the Furnaces are original from when he bought it. Not sure exactly what the timeline is on that but he has owned it for almost 15 years. So they will need to be replaced relatively soon.  

My question is not so much about the furnaces and repairs but how I should pay for these costs. Is this something i should try to negotiate by getting a lower selling price on the property. Or do something a little more creative like using a 203k limited loan to incorporate some of the larger costs (Furnace Mainly) directly into the mortgage vs out of my pocket in the future. 

Also, on the topic of the 203k loan, all the simple cosmetic rehabbing I can/ want to do myself. If I finance these (painting, flooring, cabinets, etc..) I will have to hire the work out. Per FHA 203k standards. Which will mean I have to pay for the labor on something i can do. My thinking is have the Large Expenses covered by the 203k and just fund the smaller repairs out of my pocket.

Any Advice would be great!

Thanks, 

Trevor