Renovate or Detonate

My clients wanted to purchase a one rate gem also known as ‘Detonate or renovate’ type of property. The property needed TLC by buckets and a creative financing strategy.

The property had corner beams, a roof and a title - very important basics. It was deemed less than desirable by traditional lenders due to its need for substantial repairs and updates. Clients were also going DIY on it yet were not owners builders.

In the US this properties are often called "scratch and dent" homes and can of course offer a significant rewards, if completed. Provided the buyers are prepared for the inherent challenges and costs.

Initially, the couple faced several hurdles in securing finance. Traditional mortgage products were not accessible because of the home's condition. Also going DIY on this extensive renovation banks viewed as a high-risk investment. This scenario is not uncommon; properties that require significant work often do not meet the standard lending criteria.

The couple contacted me and I was able to help them secure a loan that provided the funds needed not only to purchase the home but also to cover the repairs necessary to bring it up to code and increase its value.

The main reward of this approach was the potential for significant equity gains following the renovations. The couple was able to purchase the property at a lower price, invest in necessary improvements, and increase the home's market value substantially.

On the flip side, this type of investment carried risks. The renovation costs could have exceeded initial estimates, potentially leading to a financial strain. The project's success heavily depended on timely and on-budget completion of the repairs.

With the right financing strategy and professional advice, a risky investment could turn into a profitable endeavor.

Call, Text or E-Mail to discuss:

Julia@brokerintel.net

020 41560804