Should I buy it? Deal break down. What is a construction loan

[Wilson Lee]

Dyslexia Disclaimer.  look past the typos.

I have a chance to buy a 4 plex! I am bidding on it at auction. Up to $34,000.  The Bank's reserve is 16k.  It is class C-/D+.  We all ready own similar properties and we have systems to manage the demands which comes with this tenant pool. 

The problem? It is a 24 hour closing. Aka no appraisal. We really need to get our cash out after rehabbing it. And this area is the wild west of appraisal values. I will really like some feed back of any one who wants to put eyes on. The address is 913 Cotton Ave SW, Birmingham AL . I have a though of what the ARV is. But I really would like some one to give their opinion with out me casting a shadow them.

Numbers

Asking up to 34,000

Rehab $32,000

Evictions $ up to %1,200

Rent, $500/mo per unit. (24,000/yr) 

We will be buying in cash.  We will use a construction loan for the rehab.  We will exit via a 30 year fixed.

Some other questions.  I never have got a construction loan.  The last rehab we did was out of pocket ($12,000) and we recaptured that on the refi.   So how do construction loans work? 

Oh and I have to buy in 36 hours!

PS

The property is occupied, The tenants refused to pay do to the condition of the property.  They are on new leases with 9 months to go. The current property manager just took up the building 3 months ago. The tenants are now on repayment plans.  I am ready to evict if they don't/can't pay rent.  This county as a 3 week turn around form the date filed.

[Blake Shultz]

@Wilson Lee I own a quad on Center Way S right around the corner from you! I have done a handful of renovation loans with local banks here in town and would be happy to pass the contact to you. Feel free to reach out anytime!

Sounds like you know the market well, and I think your numbers look great. You should be able to get Sec 8 in there and get a little higher than $500/mo each. Good luck!