Best way to buy this house? Personal loan? Business Loan? Elderly family members want it gone!?
An elderly friend of the family is looking to sell their home for 130k. They purchased it back in the 50’s for 60k. It is in need of EVERYTHING…new roof, flooring, kitchen, drywall *currently paneling* but it has ALOT of potential, sits on a wooded lot and surrounding homes are selling for around 200k. I doubt anyone would get approved for a FHA loan for it. They own the home outright. The house has been sitting for sale for over 2 years since it is in need of updates and renovation.
I am looking to turn this into an investment opportunity for myself and them. Ive had several contractors in, and they estimate around 30-40k would fix up the home nicely to sell for around 200k.The current owners have NO credit. My husband and I have credit around 650-720’s. Our combined income is around 70k/year.
1) Can I apply for a ‘personal loan’ (instead of a mortgage loan) to fix up the house (even though the note is not in our name). if we would need the note, is it transferable to us until we get the loan/repairs are made WITHOUT tax implications for either of us?
2) Can I apply for a ‘business loan’ for 40-50k making an LLC for ‘home renovations’, keep the house in their name, renovate, sell, and pay back the business loan ?
2) Should they ‘sell’ us the home for say, 50k and have THEM pay all the repairs from the ‘sale’ and then reimburst them when I would sell the house? *tax implications?*
They are looking to sell the house sooner than later since theyre in their 80’s, want to use the money for living/traveling (they live with family now so they dont rent or own another home) but with the conditions its in now.. its going to continue to sit.
I would be asking for 15% of the sale price of the home in return for handling the contractors, design plan, marketing/selling aspect once its complete so its win win for each of us- we just need to know the best way to legally(and quickly) get up the 40-50k to make the renovations.
Any/All input appreciated !!
P.s Worst case scenario if the house ‘doesnt sell’ for the 200+k we’d like it to, asking 180 (current listing price plus cost of renovation) would STILL be a steal in this neighborhood.