Deal says "Cash only" but was able to get Conventional financing

[Chris Parrish]

Last Spring we purchased a single family home in Sandy, Oregon that said "Cash or rehab loan only" in the private remarks of the RMLS. After going and checking it out, I realized I thought it had a good chance at getting conventional financing. The master bathroom shower was about to fall through the house because of a rotten floor due to water leaks (see above picture), and the kitchen cabinets and subfloor were covered in black mold and rotten (see above picture). However, from the surface, the damage didn't look as bad as it was. As a realtor, I had sold a home that I thought was in worse condition than this, and we were able to sell it to a conventional buyer. I made my phone calls to my lender and inspector and decided it was worth a shot. The property was an REO so it took the bank 7 weeks to accept our offer, and then took us a month to close on it.

The house is a 3bed, 2 bath in a solid B+ neighborhood nearly Tickle Creek park in Sandy. The house backs up against a 60-ish acre vinyard, so the views from the backyard are amazing and private. The layout was also very modern (open concept) and the house had a ton of potential. 

Thanks to my great Lender and Home Inspector, we were able to get the deal financed. The deal almost fell through multiple times (as they commonly do) and I had to convince the lender that the repairs would cost less than $5k. Thankfully I have a few contractor friends who were able to write me bids for the work, even though I would be the one doing the work (which was allowed by lender as I'm a licensed Contractor). We were able to convince the lender to do an "Escrow Hold back" of the repair costs, and we had 4 DAYS to complete the repairs in order for the lender to fund us. Obviously we couldn't finish all of the finishes (like tiling the shower, kitchen counter tops, cabinets, etc.) in 4 days, but we had all the rotten flooring replaced and all plumbing hooked up and my inspector was able to show pictures of all the repair work that was done, and that satisfied the lender. 

Purchase price - $255,000

Rehab costs (we made the house top notch) - $21,000

Estimated After Repair value - $329,000 - $345,000