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Updated about 7 years ago,

User Stats

7
Posts
3
Votes
Jeremy Johnson
  • Marquette, MI
3
Votes |
7
Posts

Best Option to Acquire Financing for Rehabbing?

Jeremy Johnson
  • Marquette, MI
Posted

Over the last ~2 years myself and 2 partners) managed to purchase our first property. It started out as a land contract in summer 2015 and we got a loan from the bank in the spring of 2017. We replaced the roof (20+ years old) in summer of 2017 with a few things left to finish once spring hits and we are now looking to remodel the rest of the house ASAP and are looking for ways to finance it.

Details of the house:

Duplex, each unit is 3 bedrooms and 1 bath. We live in the top floor and rent the bottom floor out for a total cash flow of +$200 each month

Currently have about 21% equity into the house (133k left to pay on a value of 167k. Total loan from the bank was 136k)

We need to gut both units and plan to do it ourselves as we all have extensive contracting experience. We also would like to reside the house and pave the driveway (it's currently dirt). I'm hoping all of these fixes as well as the new roof add a significant amount of value to the house. 

We have not done any estimates for the rehab at this point as we've kind of just been doing things as we go and have the money to do them. However, we would like to get as much as possible done this summer as we all have the time to do it. So now I'm looking for the best way to finance this project.

From what I've read, a Equity line of credit seems like a good option for our situation but I'm worried that having very little income at this point will be a negative to the bank. Are there any options for low income earners?

Any other words of advice to newbies on our first purchase / rehab?