My partner and I (both newbie investors) have a off-market deal in the North Georgia (Cumming, GA) area. A woman wants to sell her house in a neighborhood with sales around 300k-500k. It's relatively large house. 3500+ sq ft. 5/5 with a deck, small pool, finished basement. It has been vacant for about 6 months and has fallen into neglect. The major work required is a roof leak in one corner of the house that has damaged the drywall and wood floor. Also the pool in the back has been left open and is full of debris. Some of the gutters are damaged and wood has started rotting in places. The fence in the back has fallen over as well. A few of the exterior doors have been damaged by pets and probably need to be replaced. Upstairs carpet is heavily stained and may need to be replaced. Otherwise, the rest of the house just needs new paint, spackle, and a good cleaning. The owner wants to sell the house because she is moving to another state.
The house was vacant due to legal issues with the estate in the past with the owner and the owner's mother. The current owner has plenty of money left to her from some sort of trust or will, so she doesn't need to sell the house for the money. However, she has expressed that she wants to have her hands clean of the home due to personal stress. She doesn't want to use an agent.
My partner and I believe that the owner would be willing to sell for under-market value to us. She doesn't want to deal with cleaning up and repairing the home and just wants her hands clean. She hasn't come back to us with a price yet though and we haven't made an offer. It's still off-market.
The challenges me and my partner have are that we have not dealt with properties in this price range. I only have prior experiences with less than $150K rental homes (I own one in Florida). We will have trouble financing this property for a flip since neither of us have the cash to finance the purchase and the repairs (we believe it would sell for around $475+ ARV - but take that with a grain of salt).
At this point we are thinking we need to find a private or hard money lender to finance part of purchase or repairs since a conventional lender would probably require too much cash down to leave us with any thing the use to rehab the house. We only have about $30,000 in cash to work with right now, which may only cover the repairs.
We currently plan on getting an inspector to estimate the repairs needed so we can determine what we should offer on the home. However we haven't figure out how to secure financing, and that's where we need help.
What do you think we should do about financing? Should we get private/hard money? Would using conventional loan work at all in this case where we are cash limited? Both of use aren't very experienced in RE investing so we could use some advice on what to do. We both think there is definitely an opportunity here to buy a neglected house in a high end neighborhood. I have never wholesaled before, but I think this would be a great buy for somebody with the the right funds.
Please let me know what you think! Any tips would be appreciated!
