All Forum Posts by: Austin Henry

Thanks for the replies everyone. It sounds like the gist of things is that pursuing a renovation loan in this market could be shooting myself in the foot because it would saddle my offer with all of the inefficiencies/requirements that accompany this loan type. On top of that, most of these loans require an outside contractor which immediately takes the loan off the table for me.

Its important to note that I don't necessarily need to have renovation costs covered in the loan. As long as I am not North of 10% down payment, I can cover the cost of a moderate renovation myself. Also my partner and I are fortunate to both have very good credit.

Not sure if it's a pipe dream, but the priorities I have for a loan are:
1) The ability to be my own contractor on the renovation
2) The ability to finance a property that is underneath the minimum standards of most traditional loans (Safety, Security, Soundness and all that jazz)
3) The ability to be competitive with other buyers

It sounds like there are not conventional products that work with these requirements. Is it worth it to try talking to small banks to see if they would provide a loan like this in a one-off fashion?

My partner and I are looking to buy our first home here in Seattle and need help finding financing for the purchase. Specifically, we are trying to find financing for a fixer-upper home that would not qualify for a conventional mortgage. The strategy we are leaning towards is to BRRHH: buy, rehab, refinance, and then house hack. I know that fixer-upper loans are a very common product that young, first-time home buying couples are looking for and it is similarly not a very attractive commitment for lenders to get themselves into, but my partner and I are more qualified than most, and certainly most our age.

She has worked as a designer in architecture firms for the past 3 years and also started a small business with other graduates from our university that specializes in home renovations and add-ons. I have worked for commercial general contractors for the past 3 years and have also built out an RV/van conversion that I lived in for two years during college (and didn’t spend a dime in rent!). Furthermore, I am thinking about getting my general contractor’s license in order to give us some additional legitimacy as first-time rehabers and to potentially qualify for more financing options.

I'm reaching out to the BP community to see if anyone has had luck in situations and markets like ours and what strategies they have used. Local banks? Hard money lenders? 203(K)? All cash mortgage companies like UpEquity? I’d love to hear about strategies that have worked in competitive, expensive markets like Seattle for young folks like us. Any opportunities to network with investors/professionals in the area would be much appreciated as well!

Thanks for the advice all. Lynnette and Peter, I think that the tricky part would definitely be finding the happy medium for making the situation a win/win for all involved and settling in an agreement for scope/schedule. Every property would certainly have a bunch of different needs.

I'm still trying to decide whether this would be the best route or whether it would be easier/wiser to go a more conventional route with a house hack or BRRRR.

Hello real estate gurus!

I recently had something of an 'Aha moment' about a method of real estate investing/rehab that I have not heard of before but figured someone here may have experience with. As a builder currently working for one of the largest general contractors in the United States, I have always been attracted to the idea of BRRRR investing or house flipping and doing all or most of the rehab work myself. However, here in Southern California, the barrier to entry and competition within the market leave me hesitant to risk what little capital I have on a high leverage real estate investment. That being said, rent here is so high that it is tough saving money for any real estate investment whether or not it is local. That lead me to wonder if there was a way to use my experience and strength in construction to win free rent in a property in need of a rehab.

In college I converted a Dodge Sprinter van into a 'vanlife' tiny home on wheels that I lived in for two years, so I have both the ability to build and a comfort living in situations that are unorthodox. In addition to the hands on building experience, my current role as an assistant superintendent has given me experience organizing and directing subcontractors and dealing with construction contracts. Yet another plus would be my girlfriend (who I may or may not be able to convince to join me in such an endeaver) works as an architect both professionally and in a side business of other young architects that specializes in residential remodels and ADU conversions. She could likely help with design services associated with a remodel.

All in all, I think that a live-in contractor/builder such as myself working with an investor on a project would present a win/win scenario both parties. I would love to hear all of your thoughts and if anyone has had any experience with a situation like this. Do you think that there is a market for such a relationship? What considerations would need to be made when looking at schedule? Rent/Compensation? Contract writing?

Thanks for any and all feedback!

- Austin Henry