Has anyone done a rehab loan?

[rubytue]

Looking at a house that needs work. Like roof leaks and maybe some structural stuff. Plus bring it out of the 80s. 

Given how many houses we have looked at, there is a better chance this won’t happen. But if you’ve done it, tell me about it before I get my hopes up. 

The house is waterfront, with a dock, just around the corner from us now (we are 1/4 mile off the water and have a boat). And the price is great, even sinking $100k or repairs into it. So it checks a bunch of boxes.

[lo]

We went through most of the process but at the very end went traditional. It was taking forever and the buyers of the house we were selling were getting very impatient.

[rubytue]

Nov 12, 2020 0:23:22 GMT -5 lo said:

We went through most of the process but at the very end went traditional. It was taking forever and the buyers of the house we were selling were getting very impatient.

Tell me about the process. Like the logistics. Do I need to have the contractor do an estimate before I even make an offer? Or, do I make my offer and get the estimates during the inspection period? I’m really stumped as to how to make it work in this market in particular. Every other time we’ve bought, there is time to mull things over. But we are in a market where things go in hours to days. Yeah, I can talk to my agent about it, too. But I’m trying to mentally work through it first. If that makes any sense. 

[rubytue]

Aaaaand. Never mind... we met our agent at the house and there was another group there with their contractor. I asked if it was typical to bring the contractor to the showing, and I assumed you brought them in during inspection period. She confirmed that yes, you need the estimate to make an offer.

And then, my H (with decent construction experience) saw the house. We joked about FaceTiming his buddy who is a GC. But H decided on his own it wasn’t worth it. We actually decided trying to fix it would cost more than a tear down. And we weren’t up for that.

[cuadrado]

I know you said never mind, but let me know if you have any future questions about this.

In order to qualify for a construction loan, the bank needs formal estimates from your contractor. What we have done with renovations is made an offer with a conventional loan and refinanced with a construction loan when it was time for the renovation to start.