Seeking Help/Guidance on next steps after recent purchase/rehab

[Evan Higashiyama]

Hi All,

Long time follower, first time poster here. Thank you in advance for the feedback! I bought my first home in April 2021 and have been fixing it up myself/with contractor friends/other contractors. I moved in June 1st after a lease back period. Have been going ever since!

A bit about the purchase/deal:

Bought an off market property in Eugene, Oregon. Rents in the area continue to rise and home prices have had double digit growth for nearly 3 years (97405 zip code). The property has 5 bedrooms, 2 bathrooms and an office. In addition, a separate living space/500 sq ft area that was built in hopes to convert to an ADU that the former owner never got around to. This home was added onto in 2012, so part of the home is new and the other part is from the early 70's. The home needed a lot of cosmetic work and a new roof of the older section of the house. Luckily structural/engineering reports came back great and inspections didnt call out anything significant.

The numbers:

Bought the home off market and paid my real estate friend to set up all the contractual information and represent me. I used a conventional loan with 5% down @ 3.25%. I put down enough to keep myself comfortable with the mortgage payment while having cash reserves for the rehab. 

Purchase Price: $369,000

Rehab costs to date (Cash/0% Credit card): $22,000

Additional cosmetic rehabs: $6-8k

As-Is Appraisal: $420,000 (April 2021)

Current Rental Income (friend living with me): $800

Mortgage: $2000

Comps in the area: $490-560K but average sqft price $264 with prop size of 2450 sqft, so could be more.

Rentals in the area: $2.5-2.9K a month, not including additional living space.

My financing/current capital methods:

Personal Income: $129,000 a year.

Rental Income from above: $800

Student loans: $340 a month.

No other debts other than CC payments for rehab and personal debts: $12,000.

Savings (does not include investment accounts, 401k or IRA): $12,000

Cumulative CC Limits: over $50k.

My questions include:

What are my best options to get this thing to cash flow while adding as much value as possible for a refinance (pay off CC and have cash for another off market property I have in the wings). Complete the ADU at another 7-10K for a CF of .8-1k a month? Complete the ADU and move in to rent out the 5/2+office portion of the home?

Should I continue making upgrade to the property for maximum value? Where do I stop in terms of value add?

Do I need a renter before the refinance if I plan to stay in it till I confirm my next deal?

What are my best avenues to refinance so that I can pay off my CC, recoup costs and have cash for my next deal? Is a Heloc or 2nd mortgage a poor choice if I can get this property in shape by January/February? 

I know these are loaded questions, so thank you all in advance! Happy to add clarity elsewhere!