Best first steps for newbie?

[Jason Hart]

Hey guys! Newbie here, we purchased a foreclosure for our primary residence last year for $110,000 and after $30,000 in renovations it appraised for $210,000. What would be your advice for first steps in using this equity? I'm in Kentucky about 40 minutes south of Louisville and interested in flips and rentals.

[Larry Ashlock]

If you are wanting to start locally around Elizabethtown and Hardin County I would take these steps:

1) You mentioned an appraisal of your current house. What was that done for? The HELOC? Have you started the process for the HELOC? If with Fort Knox Federal Credit Union they do have some good deals on HELOC's. I would get this process with them hammered down with their application process, appraisal, etc., and be ready to go so you have the money available before you start looking. I would also go ahead and start getting a relationship started with one of the local community banks here. My preference is The Cecilian Bank and I have contacts there if you want a referral. Having a banker ready and wiling to give you some quick cash to close a deal I have found out is gold.

2) If you want to do flips and rentals here you can certainly find some ready SFR's on the MLS that will get you close to 1% rule return that may not need much fixing up. There are some realtors here that will work with investors on those too.

3)  Courthouse sales around here are robust in numbers but attract a lot of flippers and rental folks already in the area.  I handle tax lien foreclosure sales for a company and can tell the numbers of folks at the courthouse sales has increased and some days it is crazy on the bidding that goes on but there are some days when you can get good deals for a flipper.  You might consider going down to the courthouse on Wednesday's at 2:00 and watching a few to get an idea of the prices and process.

4)  I know there are some wholesalers working the area as I get the mailers on some of my client's foreclosed properties.  If you want to buy from them just let me know and I can give you their info.  I am investing in multi-family and when I get their mailers I will call them up and advise to put me on their buyer's list if they get any leads on multi-family.

5)  If mutli-family is something you are looking for that is the area I am investing in here.  I am closing next week on an 8 unit in Radcliff and am working a lead for a 12 unit in Elizabethtown.  Would certainly consider the right partnership on mutli's and commercial going forward. 

Sorry so long was just brainstorming.  Good luck.