YAY. My offer was accepted. Buy and Hold; Nervous

[Astrid Cuas]

Hello BiggerPockets,

Happy to report that after 8 months of research; three offers rejected and two realtors I finally got an offer accepted. Small multi-family in a nice area.

Asking price: 55K, Duplex, built in 1910, Needs a lot of work; smallest house on the block. Seems like it’s a lady that’s just ready to unload the property. A relative of the owner is currently living in one side, the other side is empty.

Area Comps: 120K – 150K; Average Rents $695 - $900 (2 bd/ 1ba)

Multiple offers situation. So I offered: 60K; I was approved for 100% financing from my Credit Union. I have 30K in personal saving that I plan to use for renovations. My rough estimate for renovations is approximately 23K.

The other offer was Seller Financing, but I was not given any additional details.

Problem: Patiently waiting for the appraisal to come back and I am extremely concerned that the bank will not allow me to use the 100% financing because the house is old and in serious need of repairs.

I really want to use my 100% financing on my first property so I can do the BRRRR strategy.

But I am trying to decide....

If my Credit Union refuses to give me the 100% financing should I walk away from the house and wait for one in better condition.

OR should I use part of the 30k for the down payment and risk less money for renovations?

[Account Closed]

With projects in this price range, I've used 0% promotional rate credit cards to help with cash purchase & rehab. Once rehabbed, and tenants are in place with signed leases, you can shop for longer term lending. The leases help towards mortgage/ELOC eligibility. Credit card balances don't count against DTI calculation if paid off in escrow.

I find Chase Slate, Citibank Diamond, and Discover the most helpful, in that order. They are constantly sending us 0% offers on existing accounts. This might not be helpful at this point in time since you are in contract, but down the road it's good to have options.

I hope that helps. Good luck!