We have an off market deal (actually owned by a family member) currently on reverse mortgage which we are looking to purchase, renovate, and either hold onto as a long term rental or sell depending on loan options after reno. Because its owned by a family member we were able to workout that we could have her move out while we renovate it and get it under contract with a subject to. I am working to grasp the potential funding situation and what my options may be all said and done.

Purchase Price $215k (Reverse Mortgage Owed ~$180k)/Current Market Value $235k

Reno $25k

ARV $305-$310k

An issue we are running into is that I have enough cash on hand to either buy on conventional loan @$215k or renovate but not purchase with conventional loan and renovate. I really don't want to use hard money because as a first time investor I know rates and fees will result in high carrying costs. Additionally, I am trying to run this deal so that I can recoup as much money as possible at the end of the deal if we elect to hold vs selling. Ideally, with the subject to in place, we would renovate using cash and then post reno with take out a conventional loan for purchase price+rehab cost. Because we will not actually own the property I am curious as to what that process would look like from a mortgage standpoint and if I would still be required to bring a large down payment for a conventional loan-which I do not have the cash for.

Does anyone have any insight on a deal like this or have any advice on how I could structure it as to limit my cash investment and carrying cost?

Charleston, South Carolina

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Subject to on reverse mortgage with intentions to hold as rental.

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