Before I talk to lenders, Id like to throw this deal to the forums with clarifying questions. Meant to leave off the repeat in the title, left off the refi part by accident.
We, wife and I, are serial house hackers (on our 3rd, been using FHA and VA) but this next one we're looking at is a cash only purchase as its an REO sold by the bank. Been on the market for 100+ days with multiple price reductions. We know the grade A neighborhood very well and they're building more nice retail spots. It's perfect for us; near a train station for my wife's commute and a duplex that isn't connected to each other (gets old living below tenants).
Ways this deal could go sideways on us:
It appears the property is occupied and the tenants could fight us which could mean a few months of hold ups which would cost $$$. I'm shopping RE attornys but have been told my counties eviction court is firm but fair. I feel confident in being able to talk to the owners to come to an amicable outcome. I've done it in the past and I also do something like this for my career.
The right to redemption, assuming it's the previous owners of the mortgage, has passed. We will have no true inspection but I'm close friends with a GC (worked together multiple times with no issues and he has a great rolodex i have access to) and he'd walk the property with me (they're offering a visual inspection only) to see of any major offenses. I also have an electrician that's a family friend so electrical issues are of no concern.
We both have good reliable decent paying jobs, no bad debt with 800 credit scores. Our expenses are insanely low due to house hacking and we have a solid war chest. If the HML got drug out AND the rehab went over budget, I feel we could weather the storm.
I plan on offering 80% of list price, which would be $550k.
I assume we can we refi to an owner occupied loan after the rehab? I still have 900k of VA entitlement left as a possible option. If we moved foward, I'd wait and see how much the rehab cost and then decide on how much to leave in the deal. We'd be fine with leaving all of our money in it just fyi. We've never BRRRRed, just moved into cosmetic rehab properties which has worked great for us. But with the lack of inventory, it's forced us to explore other options. The place I feel the weakest is the refi to loan part as I've never done that before nor talked to a lender, yet, about it.
Thanks for your wisdom and advice. I can provide more info if needed.
