All Forum Posts by: Mateo Way

My wife and I closed on a gorgeous rural property in the East Hudson River Valley area of Upstate NY in May.

We are settling in and ready to take on the renovation process.

We took months to find a property that would do well as a live and flip or a buy and hold property that could be used as a luxury STR OR MTR.

The home sits on 26 acres and has gorgeous country views (pond and creek on the property as well). It was purchased at 345k but was appraised at 410K. Our research shows the potential ARV of $750-$850 (potentially higher if we add a pool). Renovation estimates came to roughly $150-$175 leaving an estimated $230k- $355+k worth of sweat equity.

We arent sure which route to take. We were initially hoping to find a private lender for the deal but are considering hard money as well. Does anyone have insights as to what may be the best route to take? Any private money lenders looking to invest into such a project? 

I appreciate your time and energy.

 Hea Stephen!

Thanks a ton for the kind words! Nice to meet other investors in the area. 

Do you happen to attend any meet ups in the Capital Region? If so, I’d love to jump on an email list or join a FB group where I can meet other investors in the area.

Thanks again and I hope our paths cross in the near future!

Be well!

Just wanted to thank everyone for the suggestions on this deal!

We closed on the 10th of the month and are officially moved into our first home.

I was able to pay off 10k in credit card debt to lower our DTI enough that we could set up a monthly payment agreement for the back taxes with the IRS. This monthly payment came in slightly lower than the CC‘s monthly payment and was okayed by the lender.

Final numbers on the deal:

Asking price: $350K

Purchase price: $345K w/ $20K in seller concessions.

Appraised at $410K

3.5% down - closing costs put us in just under $19K total including the home inspection and appraisal fees.

Based on the current market the ARV on this property is in the ball park of $700-$800k.

We are looking to reach out to local banks in order to tap in to the 65k of equity to fund part of the the renovations but I think to really bring up the value of the home we may need to borrow more to make this place a real show stopper as a short/mid term rental. Ive got 2 contractors coming to do estimates before the end of the month to get a better idea as to the project costs.

Between AirDNA and Rabbu we are looking at a potential average monthly income of $8-10k.

Does anyone have suggestions as to the best route to take? Private money with an equity stake perhaps? 

We would like to keep this property long term as a premium short term rental based on its location and gorgeous surroundings, flipping it seems possible but we would definitely wait until the market takes a turn and will definitely hold it as our primary for at least 2 years to avoid the capital gains costs.

Any insights would be helpful!

Also, if youre in the Capital Region of Albany, NY let me know!

 Sasha! These are some great ideas. 

Ive gone down a few avenues without luck but im going to look into the cheaper mortgage premium,, the SPMI as well as the rate buy down. We have a bit left in reserves that we could apply to the rate buy down.

Thanks for the help! I’ll throw an update on this thread once we get the problem solved and close!

 Definitely digging into this right now and seeing if we qualify with our lender!

Thanks again Tyler and Caroline!

 I love these ideas!

We tried to pivot to the USDA route but either we make too much money to qualify jointly and our DTI is too high, OR if we tried to purchase individually we dont have the right DTI to cover the mortgage payment at the current rate.

Im going to speak with my lender in the AM and make sure we have the final clear to close. We received a conditional clear to close approval prior to these tax issues arising so Im assuming we are in the clear but better to be certain than sorry.

Selling the motorcycle would cancel out about 80percent of the debt but they dont sell quickly during the winter months so I fear it may sit on the market for FAR too long or get let go at a price significantly below its value. (Maybe a necessary sacrifice though).

Im unfamiliar was the MCC or assistance programs so I’ll dig into those tonight.

Thank you for the help and insight. This has been a huge learning experience.

 Hea Tyler!

Im not sure what AUS approval entails? Im going to talk to my lender about increasing the purchase price to cover the taxes and put down an extra 3k from my savings to help as well.

We are already very close to the 6% limit (20k) so im not sure if the sellers will guarantee another 1,900 or so that is left, but it doesn’t hurt to ask.

I love the idea of paying down the current loans to the point of them being fewer than 10 payments. This may be a better use of the $3000 we have in reserves.

We are staying positive and KNOW we can make the deal work. Just need to get more creative!

Tax repayment is roughly 20k, a 72 month repayment structure would be roughly $278 per month. Based on our DTI we couldn't take on another payment over roughly $79 a month. I only know those numbers because I asked the lender to run them. Haha…

I’ve gone down the other avenues you’ve mentioned and only hit road blocks there. I am going to look into option 3 and see if that may be a possibility.

Thank you again for all of the suggestions! Greatly appreciated!

 Between my wife and I we do have a decent amount of “bad debt”. We’ve spent the last 3 years saving and paying it down but our younger selves really dug us a hole. So it’s taking some time. Im going to reach out to our debt consolidation loan and see if we can stretch that payment out further.

I do own 2 cars out right so the option of selling one may help.

Im worried about trying to change the loan product this far into the process as we don’t want the sellers to back out of the deal. I guess it wouldnt hurt asking at this point. Thank you for the insights and suggestions. 

 Sorry, my post was confusing. The taxes are my personal taxes. Not those of the seller.