So I found this great HUD Owned large 3 story Victorian Col on corner double lot, one block from waterfront n view from 3rd floor with open and enclosed porches, in the best part of town I grew up. ARV at least $300k today. sold for 405k in 2005. Asking $115k. its a total rehab I have good credit n only $30k on my pockets. Taxes might be a little high at $9k so i might consider just flipping it if someone else have BIGGERPOCKETS. Am a HVAC contractor, I have a great team for rehab. I dont care if I end up with the property for myself.. WHATS THE MOST CREATIVE WAY TO PULL THIS ONE OFF FINANCIALLY?
Approach a small community bank that does construction to permanent loans. Typically the process looks like this as far as funding is concerned:
- Loan amount: 70% of ARV (in your case $210,000) - 31 year loan (12 month of interest only and 30 years fixed) - Interest rates are competitive because it's owner occupied.
Your $30,000 can get you far.
- Purchase: $115,000 - Renovation Money from Bank: $95,000 - Equity / Additional Capital In Project: $30,000 (the bank may ask that you have at least 15% of the overall project in the deal).
This can be done, just call around to local / community banks that understand that market.