Investment advice on a house

[Robert Jones]

Hello BiggerPockets community,

I'm relatively new to real estate investing and would like to seek some advice regarding a property I recently found. The house is listed for just under $600K, but it has significant damage due to broken pipes. The owner attempted to fix the issue but tore up the drywall and couldn't locate the source of the leak. The property is being sold "as-is" and for cash only.

I'm a bit unclear about what "cash only" means. Does it imply that I can't finance this purchase through a bank? What options do I have?

The property has an amazing view, and most houses in the area start at $800K and up. This purchase would involve a full rebuild down to the studs. While I have solid income and good credit, I'm uncertain if I'm too new to take advantage of this opportunity.

I'd greatly appreciate advice from experienced investors on how to approach this. What should be my next steps, and what factors should I consider before moving forward?

Thank you in advance for your insights!

Best regards,

Robert

[Louisa Davis]

Quote from @Robert Jones:

Hello BiggerPockets community,

I'm relatively new to real estate investing and would like to seek some advice regarding a property I recently found. The house is listed for just under $600K, but it has significant damage due to broken pipes. The owner attempted to fix the issue but tore up the drywall and couldn't locate the source of the leak. The property is being sold "as-is" and for cash only.

I'm a bit unclear about what "cash only" means. Does it imply that I can't finance this purchase through a bank? What options do I have?

The property has an amazing view, and most houses in the area start at $800K and up. This purchase would involve a full rebuild down to the studs. While I have solid income and good credit, I'm uncertain if I'm too new to take advantage of this opportunity.

I'd greatly appreciate advice from experienced investors on how to approach this. What should be my next steps, and what factors should I consider before moving forward?

Thank you in advance for your insights!

Best regards,

Robert

You got it, it's marketed as cash-only because you can't buy it with a regular mortgage. You can however use a hard money loan! The good HML companies will look at the project closely with you, to make sure they think you're on the right track.

Now this is not to say I would go that route if I were you... it's a very heavy lift on a first-time deal. It will almost definitely be more expensive and take longer than you anticipate, and those HMLs aren't cheap. I would aim for something that needs minor work, just cosmetic improvements. 

Personally, I like "light" value-add and "core plus" investments that are larger buildings. It's a team sport, and my partners and I leverage each other's skill sets to do a better job than any of us could do alone. Happy to talk 1:1 and share more of my thought process.