What type of financing should we use for our first flip in CA.

[John Chico]

Well it has been a long while since I first found BiggerPockets and heard my first podcast. Then started reading all the recommended books ant the end of each podcast. Traveling back and forth from AZ to CA. Either driving or flying. I have heard all the podcast twice and some even more times. Its amazing how if you have just a little interest how you get drawn into this. I think most people have heard of one way to invest in real estate and then they listen to BP and see that there is so many ways to do a deal. I used to tell my wife that I wanted to flip houses, then i said i think i want to buy and hold,, then i said man lease options sounds interesting. She told me, you need to just study one way to invest and get good at that which I agree to a point. But by learning a bit of more options I am able to see and analyze and shop more deals and have more options. I think that todays market is really tough and when a deal comes along you have to throw all your options at that deal to see if you can make it work for you because if not someone with more experience will.

So this brings me to my first deal that I M working on. I seen a house on my street in CA. I always told my wife that I wanted that house. I have put over a hundred grand into my house and think it's worth top price for neighbor hood. But my neighbors house is a rental and run down and then some. So one day I wrote a letter to the owner. By the way I ran property profile and got the address. So on the letter I said (neighbor) if you ever are looking to sell your property located at such and such I would be interested in buying it as is. 

So I wrote the letter and asked my wife can you send this letter off? So I gave her the letter and the following weekend I asked her.... did you send that letter off? She said no...l need to rewrite it because  she did not like my grammar as you can see in this post. So the next weekend I asked did you send the letter she said no but I rewrote it. So I said ok can you send it? The next weekend I seen the letter sitting on my desk at home in CA. So I just took it and sent it from AZ. I didn't want to send it from AZ because i did not want him thinking about where it came from. So in a week i recieved a call from him and he said that he was interested in selling it if we can come up with a price that works for the both of us.

So I am working on the rehab cost now.

It is a 2 -1, and comps at 400k.

it needs,

. Roof

. HVAC

. Update elect/panel

. Needs about 6k yard

. Update plumbing

. Insulation throughout 

the sqft is 819 as is.

I ran comps for a 3-2 = 550k

I am deciding if I want to add the bed bath  and go for th bigger money. Plus the resale value of my house.

Also I want to have my son get traditional bank financing but what would be better,

3.5% down, 30 yr fix or

2.7% down ARMS loan. Or do we go with hard money?

I'm still working on the rehab cost and financing.

I am just looking for some advise for my first deal. 

Thanks