Buy to renovate

[Aikido]

Hi all,

would be interested in finding out if the following senario is possible or if someone can suggest a better way to do it.

I want to buy a property to renovate. If I can't negotiate access b4 settlement it means that renvations have to be done after. I want to pay for the reno from the anticipated CG rather than out of my own pocket. Are lenders willing to refinance after a short period of time?

What would be an ideal situation. Even if I can negotiate access and complete the reno b4 settlement would the banks be willing to then lend on the valuation instead of the contract price???

 

[sbe]

You can get revalued after a reno. Loaning on proposed valuation is quite hard, if not impossible.

Getting a revaluation you'll probably need to prove you sepnd a reasonable sum on it.

Of course, a way around this is to refinance with someone else, but that costs more $$

Getting the bank to ignore contract price is pretty hard if you're trying to buy, reno, finance, settle.

This one is I think impossible - buy, finance, reno, revalue, settle.

Easiest way - buy, finance, reno, settle, revalue.

All the best,

Simon

 

[Aceyducey]

Agree with sbe.

Keep in mind that renos often cost more than anticipated, so you need a cash reserve in any case to safeguard yourself...plus there are the loan costs to pay as well

I do suggest that you use credit cards to pay for as much as the reno as possible to defer payment for at least 30 days - gives you an extra buffer before you get to revalue the place post-reno (but don't hold the debt too long - even though tax deductible, rates on cards are still too high!).

The only way I think you may be able to do the buy - finance - reno scenario is with a personal loan.

Cheers,

Aceyducey