OfflineSo I purchased a home in Normal, IL. My orginal plans were to gut the place out and fix it up so that me, my g/f and our new born could move in. Little did I know my g/f decided to enforce child support on the day I closed on the property! I didn't find out until I was served a couple months later. The screwed up part is that she was living with me at my moms at the time she filed so of course she was told to move back to her moms and everything has been down hill from there. Now I have a home I can barely afford becuase the financing was based on my current income and now that income has been reduced by 20%. The property has been gutted to the studs which is aproximately 1,085 sfqft. My new plan is to fix this house and get it rented fast but given the child support that was enforced I'm having a hard time obtaining financing to finish the project. I have access to $17K through six credit cards but now-a-days that is a very bad move for financing to finsih the house. Can anyone offer an advice? It would be greatly appreciated.
Thanks,
Julio
There are a few things that you can do. The very first thing you should do is to contact a local realtor and get a CMA from the realtor. Ask him for one that will show the price in an as-is state, and one in a repaired state. Let him know that you are thinking about selling the home and that if you list it for sale you will use him/her. After getting the price, advertise the home in seperate ads (I would recommend free online ads, like craigslist)one to sell the home as-is, one to sell the home completed, another to rent the home when it is completed. This will help you get a clear plan on what the market will dictate and help you move forward with a correct action plan for this property.
If it shows that you should sell the home as-is and it is less than what you paid, you can borrow off of the credit card and pay the difference to get rid of the property. Second, you can as you said finish the home and rent this house out. Also, you can advertise on craigslist for a partner that could help you finish the project and split the profits made from the sale, or money made from renting the home to someone.
Make a plan, and a back up plan if things don't go as planned! It looks like you are already thinking outside the box on this one - good job!
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It appears that Salden has already provided some really good advice. The other thing you may want to do is a quick budget of what your monthly carrying cost may be for insurance, property taxes, utilties, etc. Soemtimes if you have to have a small loss on a sale today it is better than a much larger loss tomorrow. Even though this is a tough situation, the know ledge you gain on this deal will help you on future deals. Believe and Achieve!
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Sorry to hear about your g/f. Everything happens for a reason my friend. What doesn't kill us makes us stronger. You have options to help you get out of this situation, like Salden said get a plan and a back up plan and keep moving forward, don't get discouraged and give up ok? This too shall pass! =)
Psalms 118:23 "This is the LORD's doing; it is marvelous in our eyes."
Thanks for all the advice and encouraging words. Now I don't feel as lost anymore. Thanks peeps!
Julio
Today I went to Narragansett to look at a beach house. House is about 1400 sq. End of a cul-de-sac. Ocean view. House needs total rehab. Husband died and never finished building the inside of the house. Half of the house is finished. Half is bran new construction. House will cost about 100k for rehab. House is on the market for 399k. House is assessed at 630k presently. Houses in the area sell about 700k to 800k. The house has been on the market about a week. There are 3 offers. I would like to offer 350k cash no inspections or apprasials. Close in a week. 100k rehab brings me to 450k. Even worst case I sell the property for 600k I still stand to make 150k. I could do a construction loan. But cash is king and would get me the house. How do I get the cash? I need a hard money lender that will put his name on the proper as collateral. Where can I find one of these people asap. Or does anyone have any other solutions??? I have to do this quick because scores like this move very fast in my area!
Sheri -
Im sorry. Im new to the website. I think I posted this in the wrong area.
If you don't want to use any of your own cash (or credit cards), you can consider getting a partner to foot the rehab bill. While you are fixing it up put ads in the paper and/or online to sell the property and split the proceeds with your partner at the time of sale.
There are a lot of ways to finance something, you just need to open your mind. Good luck!!
"You only fail when you give up. Never fail to give up"
Sorry to hear about your situation ! Good fortune can turn at the drop of a dime ! I would really stear clear of the maxing out of all your credit cards idea.....this could put you in a real bind. Now that we the people gave the banks 720 billion, they feel it's justified to raise your C. Card interest rates and decrease your credit limits even if you are a long time customer with 0 late pays....I just would'nt go there ! You might try to find a investment partner to assist you in the final construction, you could pay him / her back on time and offer your partner equity sharing. Hard Money is also another option for a construction loan....however they will normally offer only 80%, very short terms (6 months) at gut wrenching interest rates.
Good Luck !
I have used hard money lenders in the past. they are not all that bad.
What you need is a plan.
If you were to use hard money, you would need to know what finished product could sell for.You would then locate hard money lender to finish property. Your best option would be to sell finished product.
Just make sure that all of the numbers work
This could ultimatly turn into a posative thing if you think it out.
I could give you some expert advice on both topics. But, as far as renovating on a tighter budget, what I would do is, I would scale back areas and complete steps in a little bit of a different method. Change of plan.
For example, instead of buying products from home depot, you could get almost "everything you need for re-hab on craigslist in the free section". A rental grade job can be done in many different fashions. You could certainly get alot of the rugs,doors, appliances, cabinets, paints, actually, with almost everything.
The thing is to stick to the job no-matter how dark the days get. Thats what construction is. If your only talking, a small house, 1000sq. I think you said, you can "locate the material and that is key". Forget about your buddies who you promised work to, it time to do the job yourself.
Get all or as much as the material from craigslist in the free & cheap-0 sections. Do your homework, and don't expect others to help you out. If you want to get ahead, do it yourself and be a man. Nows your time.
Construction makes and breaks a lot of people, relationships and marrages. Your not the first to be in your shoes. What your dealing with is human nature. Condtruction brings out the worst in almost everyone. People can't handle the changes. However, thats there problem.
By having all the materials is key. Now you only have to do the work. Doing a little job like yours, can be the most difficult thing in the world, if you want to make it into that. Forget about your girlfriend for now, money is more important.
If I had a picture of the house or condo I could tell you in a matter of minutes exactly how to do it.
Hit me back. Thats why I have the ask the builder in this section. For any of you guys getting lost in the the stages of renovation. Chaulk it up for experience and move on. "Construction get's done by talking with action" not fighting over bull****. The bull goes with the territory.
Finish the job. When its said and done you'll be back in love again and the tuff times will make you a better person. My take, its a joke to think that a woman is going to help in construction. Its not most of womens cup-of-tea. Be a man and do the work. Your girl will grow much more in love after you talk with action. "Thats a guys job". And remember, "its money first" then lovy dovy. You want the honey you gotta have the money.
Let me know were your at.
Kev
I'm in the middle of Dean's second book and I found a property that I may want to make an offer on. It has been on the market for 6 months. The price has come down from 135 to 120 to 110 and now it's at 95. Others in the neighborhood have gone that low, but no lower. Most have sold within the range they've been asking over the time listed. The reason nobody will touch this property is the foundation has problems. They claim in the disclosure that they have had Pier Masters secure the foundation. Later they mention that Pier Masters has quoted 8k to "fix" the problem. They mention, "must sell" and "no resonable offer refused" so I'm pretty sure they just need out bad.
I don't have any money, and the property IS listed on MLS. It looks like I should offer very low and then try to assign it or do the IEE. But I can't afford to fix it and I can't get a mortgage for it to keep it and just rent it. I'm just a rookie so someone PLEASE give me advice.
David
I know right where you are at.
Options
Hard Money
Sell it now, take a small loss like Joe said. Better a small one now as opposed to a big one down the road
I know its hard to do I have done it--A second job. when I got divorced and had to pay support for 3 kids I actually had a full time job and 2 part time jobs. It is hell, but you have to do what you have to do my friend.
Advertise on craigslist for a partner to finance rehab and sell, split the profit 50/50
Stay in the house, bare bones,scrimp borrow from family
I have been there, I know the pain and hardship. But one day you will come out of this smelling like a rose, it can happen and will happen. Don't you ever give up........Jan
Hi david sounds like a it could be a good deal. However don't let the foundation scare its usualy fixable. But if the house needs to be jacked up, it can mess up a lot of drywall and door opening. It might even cause the roof to leak. So you need to lock it up very cheap becuase there will be a lot of hiddin repair costs if that is the case. But don't run from the houses with the foundation problems. You can usually get a real good deal on them because it scares a lot of people and its not that big of a deal to fix. when you hire the proper person. GET ESTAMATES AND GOOD LUCK TO YOU ON THAT ONE. If you have any other questions you can sent me a personal message and I will help you out. By the way I own a res. contruction co.
Stuart Henry
Millionaire in Training
First if you have not gutted the place out perhaps there are lots of cost savings you can do and get the property rented Wish I could see it to give you more specific advice. you could maybe find someone that is a handyman offer to sell to them with them completing the remodel for the down payment. Lots of things you can do if you show some pictures could maybe help alot more.
Best Regards
I have got done reading "PFRERN!" and have learned a boatload of info that i never knew i would know! But what my ? is what do i do next? Do i look for a real estate agent before i do anything? Do i find buyers before the deals? i have never bought property before will the real estate agency even take me seriously? This is what i feel was left out of the book on what to do first. So anyone with info to help me start my empire i would greatly appreciate it! Thanks for ur time and reading this!