Newbie trying to understand rehabbing and financing renovations!

[Milton Chamberlain]

Hello all! 👋🏾 My husband and I are new to real estate investing. We just bought our first 3 SFH (buy and hold) in Columbia, MO. We bought these from my dad, who we didn't realize was essentially a slum lord 😳 (sadly, he didn't realize this either 🤦🏾‍♀️). We didn't have inspections or anything done since we were buying from family. Needless to say, we have learned our lesson there. Anyway, we have one house that will be vacant within the next few months and it will most likely be a gut rehab (3 bed, 1 bath, 912 sq ft). We are having an inspection done and walking through to get bids for the rehab within the next few weeks. The whole layout is pretty funky as it was built in 1930. I think redesigning the layout would really improve the house, but I know nothing about designing or floor plans or anything (I am a dentist by day 🦷 ) Is there a good floor planning software that is recommended or would you hire a professional to help figure out how reconfigure the space? 

Also, ideas for financing the rehab? We've depleted much of our funds buying these 3 houses and we're in the process of rehabbing one of them currently. I was considering opening a HELOC, and had thought about a cashout refi, but didn't know if that made sense since we haven't yet closed on the house we would do this on (the one currently being rehabbed). Any and all suggestions are welcome! Thanks so much 🙏🏾

[Joshua Espejo]

Originally posted by @Milton Chamberlain:

Hello all! 👋🏾 My husband and I are new to real estate investing. We just bought our first 3 SFH (buy and hold) in Columbia, MO. We bought these from my dad, who we didn't realize was essentially a slum lord 😳 (sadly, he didn't realize this either 🤦🏾‍♀️). We didn't have inspections or anything done since we were buying from family. Needless to say, we have learned our lesson there. Anyway, we have one house that will be vacant within the next few months and it will most likely be a gut rehab (3 bed, 1 bath, 912 sq ft). We are having an inspection done and walking through to get bids for the rehab within the next few weeks. The whole layout is pretty funky as it was built in 1930. I think redesigning the layout would really improve the house, but I know nothing about designing or floor plans or anything (I am a dentist by day 🦷 ) Is there a good floor planning software that is recommended or would you hire a professional to help figure out how reconfigure the space? 

Also, ideas for financing the rehab? We've depleted much of our funds buying these 3 houses and we're in the process of rehabbing one of them currently. I was considering opening a HELOC, and had thought about a cashout refi, but didn't know if that made sense since we haven't yet closed on the house we would do this on (the one currently being rehabbed). Any and all suggestions are welcome! Thanks so much 🙏🏾

Hello fellow dentist!

If you are set on changing layout for a rental, just make sure that you are in an area with rent can support a major renovation like this. From what I know, major floor plan changes would make sense for a flip. Rentals are fine by updating the tiles, floors, and other materials. Essentially a face-lift. Just be sure you're getting the most bang for your buck if you decide to keep it for a rental.

In terms of financing, private and hard money loans are options as well. Just be aware of the costs of borrowing this money and how it will affect your bottom line. Good luck!