Stepping out on faith, but looking for support/advice

[Torrean Edwards]

Early in my investing career, I had some success, but then the crash happened. It took more than a decade but I am excited (and terrified) to re-enter the fray.

After dipping my toes into the market, I have battled against my paralysis and taken the leap. I have a property (fix and flip) under contract, but now, shoot, the REAL work begins.

I am located in Milwaukee, WI, but my property is in a near suburb of the city. It was a VA foreclosure and in an incredible neighborhood. Structurally, the property is in pretty good shape EXCEPT one problem that I cannot properly assess: the plumbing will not hold pressure. I have some guesses as to what the problem may be, but I need a good, investor-friendly plumber.

I will also be doing all the cosmetic things you can think of: paint, flooring, bathroom reno, kitchen reno, so I am open to carpenter or design suggestions.  

Also, I am considering alternative financing options (beyond Hard Money). If anyone has tips or suggestions, I am more than open.

For better or worse, I am taking a leap. I am hoping the Bigger Pockets community can help. In fact, it was the community that got me this far! 

Thank you everyone.WIiling to share more details if people are interested! 

[Jeffrey Blackman]

Quote from @Torrean Edwards:

Quote from @Jonathan Klemm:

Love that you are stepping out IN FAITH @Torrean Edwards!  Feel the fear and do it anyways is one of my motto's also a very great book!

I am only a bit south of you here in Chicago, but I also have some pretty good connections in the Milwaukee area.  I'd highly suggest getting to some local meetup groups in MKE:  https://www.biggerpockets.com/forums/521-real-estate-events-...

When you say you are considering alternative financing options, what does that mean?

Can you share the details of your flip under contract? What's the location, purchase price, expected Reno cost, ARV, etc.?

 Sad to say, but i let this property go. After meeting with a number (like 8) different contractors the quotes i got back made the deal, not a deal (i think). 

But i would love to connect with your connections up here. 

To answer your questions here though:

Alternative options - I was going to sell all my stocks and etfs, take out a HELOC, and some credit cards to try to shoestring together enough to the deal without a hard money loan.

My numbers on the deal were as follows:

The Property was in Hales Corners. In current configuration (3 br, 1 ba), I had an ARV of 324k. I had the property under contract at 217. My walk through estimate was roughly 60k, Hard money was 12%. My cash to close was 62k because of construction holdback from lender. I was fine with all these numbers.

Then I met with contractors...

First, I wanted to add a new bathroom and approximately 450 sq ft of additional living space. With these additions I got comps putting the deal's ARV around 347.

The punctual, timely, and professional contractors I met gave me quotes between 90-135k for my full project. The contractors who did not give me detailed bids, or even formal bids at all, were quoting me between 15-45k just for labor. I would have been ok with the latter numbers because I have been stockpiling materials for like two months, but...I did not know if I could trust them due to the lack of "professionalism," and my lack of experience. 

I feel terrible walking away...but i was under incredible stress (not sleeping and eating like crap) trying to figure it out and make the quotes work by paring back finishes. That being said, I had competing issues. 1) my wife and I are buying a new primary residence (much to my chagrin), and 2) in december, we bought a condo rental that is currently being renovated (a much lighter project) and that process is also a little stressful.   

I feel like a quitter, but I am not giving up on my dream and welcome all opportunities to learn and continue. 

@Torrean Edwards, you are not a quitter. The deal didn't make sense. The numbers didn't work with what you are able to see. Anytime you do $100K worth of work, you find surprises, so the real number is probably even higher. Walking away seems smart.