Best Financing Solution for First Flip

[Nathan Huyett]

Hi everyone,

I am interested in putting an offer on a foreclosure next to my house. I haven't had a chance to do a thorough walk-through of the property yet, but based on what I know about the place from living next door for several years, there appears to be a very reasonable opportunity for profit. Based on the amount of traffic through the home over the past week, it appears plenty of others think so as well. There are several factors in play that make this deal more complicated. First, my primary residence is a newly constructed house immediately next door to this vacant property. I also own a three-unit apartment building directly across the street. Obviously it's in my best interest to have control of this property one way or another. Second, my wife and I are potentially looking to sell our current primary residence and purchase a larger home. Depending on the outcome of the vacant property, the ability to sell my home could be impacted. Third, my primary debt (aside from mortgages) is student loans, which is driving up my DTI to the point where it might preclude obtaining a traditional mortgage. I'm leaning towards flipping it due to the large difference between the listing price ($72,000) and the ARV of approx. $150,000. Of course, once I flip it, I'll no longer have control anymore. I think once I can do a thorough walk-through and really nail down the approximate repair costs, I'll get some clarity as to whether I do a flip vs. buy and hold. In the meantime, I'm thinking about using a hard money lender to have the proof of funds needed to submit my offer. If anyone has any other suggestions, I'd be open to them. Does anyone have experience with hard money lenders that could suggest a good company to use, and could anyone provide some clarification as to how much I'll need in cash up front?

Thanks in advance for the advice!

Nathan Huyett