My wife and I are newly minted empty nesters, with our girl going to college in September. I listed our property on Zillow's Make Me Move at 300k (we had failed to sell for 350k a year earlier) and within three days we had a contract for full list price, closing at the end of August. I am looking at an August, 2020 FIRE date, which gives us another 5 years in the area. My wife and I would like to buy a distressed property in the 60-100k range, live there and fix it up, then turn it into a rental property.
Most distressed properties that we've looked at cannot secure financing - no kitchen or maybe they're missing a furnace. They're listed as "100% cash deals only" to get around this. We have 20k to put down but we'd prefer not to wait until we have 100% cash available. Looking for alternate options that let us move forward with less than 100% down. My thoughts:
- A rent to own deal where we put 5% down, pay rent and agree to purchase the home within 2 years. We make improvements at our own cost until it's "finance-able" then get a loan for 80%. I'm not clear on the risks for a deal like this but they seem substantial.
- Find sellers that are willing to hold our note; tough since most people selling these properties are looking to get out of them and selling below market. We looked at an 80k property with an ARV of 160k this morning, which got an all-cash offer for list, 5 minutes after we walked in. Had been on the market for 3 days.
Any other options for a deal like this? We're handy people very excited to be ditching our $3100 mortgage payment and start building a passive income stream over the next five years. Thanks!