Rental Property Investor · Tucson, AZ · Member since 2020 · 15 posts · 5 votes
Need some creative financing strategy here. Here’s my scenario:
Found a property on MLS with no pictures inside the property and no description of repairs/maintenance. The owner will show property once there's an approved offer. I wonder if it needs just cosmetic work, and I only have $5K cash, is there a way that you can make a deal with the owner to do the rehab and just bump up the price so my loan can cover it?
You could try to get an FHA 203k loan, which will include repair costs into the loan amount. My understanding is that you get the draws on the repair money as you complete the repairs, but the loan would be the contracted price plus whatever the cost of repairs.
Rental Property Investor · Shakopee, MN · Member since 2015 · 985 posts · 374 votes
6y
Almost impossible to give him a price without first knowing what it needs for repairs.
You can try and see if the owner will do the repairs. If he just wants the property gone and sold he probably won't put any more money into it. Some people are just done and want out.
Once you find out what it needs you can throw him a few offers. One with him doing some repairs on it for X amount. Two with him doing no repairs and you buying it for X amount. It can't hurt to ask. Worst he can say is no and then you just need to figure out repair costs. Make sure your comps are strong and your repairs are strong quotes as well. That should hopefully cover you.