The purchase of a distressed property can always be a gamble, especially if you are not sure you will be able to get a home equity line of credit or traditional mortgage. If you have purchased the property outright, you have more options than just the traditional mortgage offerings for a home. If you are interested in getting a distressed property set up so that you can get the home completed for living in, you can apply for a hard money loan. Hard money lenders will give you money based on assets. Here are some ways that you can structure a hard money loan to get the property completed.
Get a certificate of occupancy inspection
In order to figure out where to put the money from your hard loan, you will need a certificate of occupancy inspection. You can hire a contractor to come out and perform the inspection or you could have the city come out and perform the inspection themselves. They will be able to let you know the bare minimum work that must be done to the home before you can legally reside in the house. The inspection should give you a list of the items that must be fixed, plus what is already up to code.
Work on water and electrical first
The plumbing and electrical systems of a home should not just be brought up to code, but updated to the latest systems. This provides the most bang for your buck, as it will keep you from needing to make any changes later on. Be sure that the pipes will last for many decades and that the electrical systems are wired in a way that will allow you to install light dimmers and switches that can be enabled via smartphones.
Weather proof the home
One of the things that you can find in a distressed or incomplete property is the lack of weather proofing. Whether this is the installation of hurricane shutters or rebuilding the gutters to handle heavy rain, you should weather proof the home. This insures that your home will not receive any damage due to bad weather. This will also make the property easily insurable, making it inhabitable for you. Once the home is properly weatherproofed, you will be able to move into the property without fear of needing yet another loan to fix any damage that comes along as a result of the seasons.Share
1 June 2017
I always wanted to buy my own home and after saving enough money for a down payment, I decided that it was time. Before I started looking at houses, I talked with a loan officer about financing. I wanted to know how much money I could borrow so I could look at houses in that price range. I was very happy after my meeting at the loan company and I was ready to start house hunting. My name is Jarod Spangler and I'm now a homeowner. If you have the dream of owning your own home, I think you'll find my blog of help to you. I've documented my journey of saving money, securing a loan and purchasing a house. To help you become a homeowner too, I'm offering advice and tips of things that I've learned along the way.