My first BP post! Foreclosures

[Aaron Dennis]

Hey BP community,

Well, my wife and I jumped right in to real estate investing mid 2021 and I'm happy to report that we now have 2 long term rental properties with great numbers! So, with a slight taste of success in our mouths, we've just decided to pursue a much bigger deal - a big foreclosure with a purchase price of 800k with value ranging from 1.1M -1.3M (depending on the amount of rehabs done - which it doesnt need much).  We are considering 1) selling our primary residence and moving in to this foreclosure OR 2) performing a light rehab and selling it. We're all over the place in terms of our hopes for financing so wanted to see if anyone has some experience they could share. 

Option 1 (preferred option): Move in to the foreclosure and sell our current home. Our current primary home has about 300k in equity and we have some reserves (approx 150k) but not nearly enough to cover the entire 800k. What are possible financing options here? Tried conventional financing with a local bank but turned down due to slightly high DTI (they applied my primary mortgage, new primary mortgage, and one of my rentals - but did not include my rent as income since its been less than a year). Also spoke with a couple hard money lenders but they would only do it if I purchased through my business with the intent to sell or rent it out. We're also considering selling our house quickly (which solves the DTI issue) and trying conventional again. Timing here seems tight and the stars would have to align. I've heard closing a foreclosure normally takes 3-6 weeks after you've won the bid - any insight into closing times would be helpful as that alone may eliminate this option

Option 2: Perform a light rehab and flip the house. In this scenario, I probably wouldn't want to tap into my funds/equity as much so I'd be looking to fund 600-700k with intent to turn sell within 3 months. Financing options here? 

BTW - I'm in NC and we currently have the highest bid (yes, I know its not wise to make a bid without financing established). When your backs against the wall, there's only one way to go.

Thanks a ton!

Aaron