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Updated almost 2 years ago,
Help me analyze this PLEASE!
Pretty much settled on what my 2nd door will be. It's a mild fixer, which is what I wanted. I am confident I can bring the value up to $360k+ using comps from some nearly identical but outdated homes within 0.5 mile. I will be using the VA loan. My dilemma is this:
Stuck between using normal VA, $280k pp @ 5.35% and using $15k of personal investments (which I am really tied to because it wasn't easy accumulating) to fund cosmetic upgrades (upgrading floor to LVP throughout, resurfacing + painting cabinets, replacing counter tops with quartz, exterior/interior paint, appliances, and a new front door). Monthly payment roughly ~$1890 before utilities.
OR
VA renovation loan, $300k pp (includes $20k for reno) @ 5.85%, monthly payments ~$2089 before utilities. Plans are to for sure IRRRL when the opportunity presents itself down the road. Will pay roughly $2500 more over the course of year 1 overall, but about $4k more in interest over year 1. I don't know whether I should be hung up on that fact or not.
The way I see it is that the leverage provided to me should be a no brainer if I'm comfortable with the payment. Especially if it can appraise properly. Part of my worry is whether or not rent rates will support cash flow in a few years when I move. I know they're beginning to trend down at the moment, and it's causing me to be forward thinking, maybe too much. The house is gonna look modern and awesome when it's finished! Can I rely on that? Any advice for other high-grade renovations? Any reno you recommend completing myself?