Making The First Deal A Winner With Creative Financing? How do you Exit?

[Jared Emerick]

 Hello everyone,

I have a property ready to get under contract. We're still negotiating, so this is a "worst case scenario (at the price now)" situation. Asking for thoughts and opinions. This will be my first home which requires actual rehab work. Currently I have 1 rental which we have on an O.O loan, lived there, carpet and paint rehabbed, and now rent out.

Situation:

Purchase Price: Home: $59,900 (land is worth $33,000 and is next to mine)

Plan A: Rental. This home is located directly behind my house, actually touching property lines. (I would love to keep this to add equity to my current home.)

Quote for Rental Rehab: $15,000

ARV: $90,000

Rent: $900-950/mo.

Plan B: Flip. I could use the quick cash to advance my investment career. 

Quote for Flip Rehab: $30,000

ARV: $110,000

I've run through several calculations on the returns and profits. This is why I am posting this now. The reason why is because of financing. Creative financing would be the purchasing angle of this home. My hard money lender can do 3 options for me: 

For all 3 options: Will finance 100% if below market value. (more or less 80% LTV) Will finance rehab costs for me. Possible to delay payments during rehab.

option 1: 15%, 5 points, Amortize after 5 years

options 2: Same 15/5. Interest only or amortize. Ballon due in two years. After 2 years, can extend additional 2 years by paying 5 points out of pocket. This can be done for up to 10 years.

option 3: 10 year term at 17%. Amortized or interest only. Ballon due in 10 years.

Other options include: Getting a HELOC to help with costs. (@80%- $10,000 available. @90%- $26,000 available; we would be able to qualify for 90% at our local bank at a 4.0x rate if by the end of the year)

Loans? What loan types are offered that non-owner occupied investment properties qualify for?

Thank you for any advice, wisdom, knowledge. It will be much appreciated.

Jared