Board Topic: Beginner purchase properties from tax auctions
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Beginner

Posted by: G**ArmyGuy Oct 17 2004, 11:21 PM
I am an active duty Army soldier in Afghanistan. I have a VA certificate and am trying to get info on getting a small business loan to help me purchase properties from tax auctions and help with refurbishing homes in St Louis, MO. The homes are beautiful older homes and can be turned over with a profit rather easily. I just dont' know where to start. My brothers and Sister are helping me do all of the business while I am deployed, but they nor am I aware of exactly what options I have sinced I am a veteran and not home to get involved.

If you have any info that you can help me with, Please Help me out!

Posted by: loanuniverse Oct 18 2004, 08:31 AM
ArmyGuy

The problem with this type of business is that it is not eligible for SBA financing due to its speculative nature. My guess and this is only a guess because I do not do many SBA loans is that you might be able to be eligible if you were to create a company that did not own the real estate, and whose sole purpose was to do the remodeling.

This means that the funding for the acquisitions is going to have to come from other sources. If you are going to be doing the refurbishments yourself, I would say that it would be best to keep the purchase on the residential side of lending. Depending on the property, you could get away with giving as little as 5% down payment.

In addition to financing problems, you start getting into licensing problems if you want to go ahead and do refurbishments depending on how the municipality regulates building and zoning. In my area, there is one municipality that is so strict that it requires a permit for painting “even if the painting is done inside”.

Good luck
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