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Updated over 3 years ago,

User Stats

18
Posts
3
Votes
Joseph Jordan
3
Votes |
18
Posts

Please help a newbie out!

Joseph Jordan
Posted

Hi all,

Like many others I am new to real estate investing and decided I would finally stop thinking about it and actually move forward with trying to purchase, rehab, and sell my first investment property. I feel like I have done a good amount of research into the different aspects of the industry but still have so many questions that I thought some of you could help me with. A little background about me - I currently have a 9-5 and don't plan on quitting any time soon, although I don't really have much of anything in savings besides your typical 401k. I bought my first primary residence home back in 2015, fixed it up a bit but also lived in it for 5 years, then sold it and made roughly $120k due to the increase in the market over that span of time. I used most of that towards a down payment on my second/current primary residence, which now has roughly $200k equity.

I plan to use a hard money loan to finance most of the project (purchase + rehab), but will come up with 25% cash down payment towards the hard money loan as the lender I'm looking into says they will finance a max of 75% on the first project. The 25% cash down payment would come from a home equity loan of roughly $40k that I would take out on my primary residence. Just yesterday I filed for my LLC so I feel like I'm taking a step in the right direction, but wasn't sure if I absolutely NEED to purchase additional insurance on top of whatever protection the LLC provides me. The sales rep for the lender that I'm working with came up with a snapshot of the "flip economics" for the specific property I'm looking into and even with all the costs involved, still seems like it could be a good opportunity. I have attached a picture of the snapshot he provided me.

The property I'm looking into buying is a tax foreclosure being auctioned by the county and has a lot of cleanup involved. I've included a link that shows pictures of the property (if that is okay?): https://www.co.marion.or.us/FI...

My questions:

-I've heard of the "70%" rule - but wasn't sure if that always applies. How much should my max bid be on this property?

-Do the numbers look about right in the "flip economics" screenshot my potential hard money lender sent me? I know it doesn't include the realtor fee which I'm still expecting to be about 5%.

-Is there anything else I should know about my scenario before I attend the auction?

I feel like there's more questions but that I'm just forgetting them right now. Any advice before putting my whole life on the line for this property would be much appreciated! Thank you!

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