Seller concessions for a Coliving house hack to use on Renovation

[Tyler Ferguson]

Hello!

I am looking to house hack a single family home through Coliving and renting out bedrooms.

I took a course on this and one of the main strategies pushed is using seller concessions towards renovations of a property to add bedrooms and bathrooms even when using a conventional mortgage. He wouldn't go into details on how he structures this unless you paid for his 10,000$ course on how this is structured.

Does anyone have thoughts on how to do this? My understanding is typically seller concessions can only go towards closing costs or buying down the rate. I am thinking maybe there is an agreement structured for payment after the deal is closed?

Thanks for any input

[Josh Bowser]

Hey @Tyler Ferguson - please don't spend 10k on this guy's course.

In a real estate transaction, you can pitch anything. However, the likelihood of a seller reconfiguring the house for you is loq if you don't have a previous relationship or they are in a dire situation. I can't speak for Austin, but in the Atlanta market I cannot see this working if you're asking for this straight up.

With that being said, it isn't that uncommon to push up the purchase price within reason to ask for the equivalent in credit back. If you're putting 10% down on a 100k property it could work something like this:

Asking Price 100k with a 10% down loan -> Offer at 110k and ask for 10k in credit back. In this case, you could receive a credit for 9k towards closing which frees up 9k of your down payment money to fund the renovation of reconfiguring the walls.

I'm not entirely sure what your situation is, but if you can put 15-20% down on a house hack deal you may want to consider hard money for a medium-heavy rehab to perform the reno and reconfigure the walls and refi into a conventional after the fact. 

FHA 203k is another option - but I have been told that process is slow (have not done one myself)

If qualify for conventional - you may be able to get a construction loan + mortgage to help get you through the rehab. Feel free to reach out as I am happy to chat through my thoughts on this!