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Updated over 4 years ago on . Most recent reply
Financing Advice for First (non live-in) Fix & Flip
Hey all! I have the following potential deal on a fix & flip and curious if anyone has advice to creatively finance the deal: SUGGESTIONS WELCOME!!!
Asking Price: $269k
Renovation: $80k (added about 10%-15% onto my original numbers for emergency)
ARV: $395k
Working with a hard money lender to potentially get 90% of purchase price and 100% of the renovation covered, but I need a plan B if they say I don't have an established enough portfolio to lend. I have about $17k in cash I can put down whether that's through hard money or a construction loan. Unfortunately can't do FHA 203k as I'm already living in my primary residence as a live in flip. I could partner up with a friend for more cash for the downpayment, but selfishly would like to keep it an individual deal for a few reasons.
Any other suggestions out there on how I could creatively finance this in my budget? Also willing to take any feedback (harsh or not!) on thoughts on the deal numbers.
Thanks in advance!
Most Popular Reply
![Jonathan Barr's profile image](https://bpimg.biggerpockets.com/no_overlay/uploads/social_user/user_avatar/1607807/1621514120-avatar-jonathanb453.jpg?twic=v1/output=image/crop=1583x1583@1305x574/cover=128x128&v=2)
I don't think you have enough spread there.
Closing cost with commissions will be about 8%.
Then if you take into consideration the cost of hard money it'll become really tight. You will mostly pay 2pts on full loan amount for construction money too and then interest while holding the asset. Doing all the math right now you probably almost break even. If you sell for less or construction goes higher you can quickly be in territory to lose money. You probably need buy for 250 or less. Those are my thoughts but I don't know that market or more particulars about your deal.