Lowering your standards invites expensive evictions and repairs. 

Hey @Brad Roche - We do a significant amount of renovation loans (both Fannie May & FHA) here in Chicago and prefer the Homestyle loan only because it's less stringent on the borrow about what they have to repair, and they provide the general contractor a material draw at closing which helps the project start on the right foot.I thought the minimum down payment was 5%.

Even if you break even, you will lose money every month it sits vacant, when you need repairs, property management, etc.

Seller is the Agent.Seller bought property in January of 2023 for $730,000Current “As Is” Value : $770,000Target Acquisition Price: $730,000-$780,000 After Repaired Value: $900,000Repair Estimate: $120,000Initial Offer Amount: $715,000Loan Program: Bank Statement Program.Total Estimated Monthly Payments (Principal, Interest, Taxes, and Insurance) $5500/month (based on $770k purchase price)Estimated Gross Yearly Income from Short Term Rental: $160,000 (65% Occupancy, $700 a night| (STR Listing Comparable properties Listing 1 Listing 2 Listing 3)Net Monthly Income after management and taxes: $11,751.25Net Monthly Income after Mortgage Payments: $6251.25 ($75,015) Per YearTotal Cash Investment: $297,000 ($177,000 in down payment and closing costs and $120,000 in repairs)Average Yearly Return on Investment: 25% yearlyAverage increase in property value per year: 5%Average increase in booking revenue per year 7.5%Property Value average after 10 years: $1.5 millionTotal Cash received over 10 years: $1.3 million.Total Equity multiple min over 10 years: 6x total return on $297,000 invested.

Account for all costs, including closing fees, holding costs, and repairs.

We are splitting up capital contributions at 50%, but see having different involvements in the repair process.

I'm in Detroit now for inspections on one and to generate the scope of repairs on the other.

This can be especially helpful if you’re uncertain about repair assumptions or costs.If it’s a contractor you’ve worked with multiple times, involving them early in the process is often beneficial.

Repairing to sell might recoup some costs, but given the market and your limited funds, selling “as-is” is likely the best option to minimize further losses.

Quote from @Ricardo Polanco: Good evening everyone, I am evaluating the possibility of buying a multifamily property in Scranton, at this moment it has 2 apartments that only need cosmetic repairs and it has a big 2nd floor unit that needs a full repair.