Financing solution search for 1st time investor - Duplex

[William Garrett]

Hi everyone,

I am a newbie investor (full-time travel nurse) looking to make my first deal happen. Currently I am in the St. Petersburg, FL area and have been looking for multifamily property here and near my hometown Nashville, TN. I found a duplex in St. Pete ( 2:1 and 1:1) that has gone through the foreclosure process and is now listed on the MLS, and therefore I do not expect it to remain available for long at the current asking price. The property will need to some rehab (roof, dry wall repair, windows, paint, flooring, etc.). While using the BP rental tool I'm seeing a potential to have a renter cover mortgage costs, or more, every month. I would not be opposed to offering a furnished rental to other healthcare professionals or Airbnb instead. Currently I live in a furnished duplex (very similar neighborhood/sq. footage, only 5 minutes away from the foreclosure) and am paying $1400 in rent with the owners successfully Airbnb-ing the other side.

At the moment I am planning to close on a single-family home in the next 2-weeks back in Nashville.  This home is my current "permanent address" and I am purchasing it from my step-grandfather for significantly less than what it is worth.  It is a conventional loan with 20% down from a gift of equity and I am looking to have about $153K in equity on the home after closing.  My mother resides at this home full-time and will be paying the mortgage along with 90% of utilities every month.  I will make this a rental property if she decides to move in the future.

Being a travel nurse my job requires that the hospital I have a contract with be approximately 60 miles or more from my permanent address.  That being said, I cannot take on a loan with a bank that requires me to move my permanent address to this foreclosure duplex for the next year.  

This being the majority of my situation, I am struggling to decide on the best financing option. I do not have the cash for a large down deposit nor the cash for a rehab. I have been leaning towards hard money if I am able to borrow 75% ARV ($120k purchase price with ARV expected to be $160K or greater) and refinance to a conventional loan after renovations. This would still require me to find the funds for the rehab and I have leaned toward the possibility of pulling equity out of the home in Nashville to fund it.

I apologize for the lengthy post but I figured it would be hard to get thorough responses without a proper situation explanation.  These are thoughts I have had and know there is a strong likelihood I am missing key factors or possibly misinterpreting the numbers.  Any advice or creative financing thoughts would be much appreciated!! 

[William Garrett]

@Stephanie P. 

I will likely try to use the BRRRR method with private lenders that I know personally. I did not know until last week that they were already lending in other real estate ventures. Now that I have someone that I can partner with it comes down to finding the right deal and presenting it to them. The duplex looks like it went through auction again and sold. Thank everyone for your input.

@Erik B.

I hope both of those deals work out for you!  The numbers made sense for the St. Pete duplex but I had to pass it up due to auction time constraint.  Going to stay active and find that first deal with private lending partners.