The art and science of asking questions is the source of all knowledge. (First potential deal)

[Matthew Horn]

Hello BP family,

I hope that you all are well. I recently found a potential deal and i wanted to get some opinions and advice about moving forward. My goal is to get the house at a great price, make the necessary improvements and flip it. I have never worked with a hard money lender before, I know that i will need one for this project.  Any advice with approaching hard money lenders and how to prepare my self would be greatly appreciated.

The House is a REO listing at $41,500

Its going to need about 15k-20k in Rehab. 

I checked the comps in the area and there has been numerous homes with the same Sq Ft that have sold for around $87,000 -$90,000.

The house has  2Beds 1Bath

768Sq. Ft.

$54 / Sq. Ft.

Lot Size: 5,550 Sq. Ft.

Built in 1918

The house has been on the market for 59 days. I would like to know what your thoughts are regarding this listing. I have a lot to learn as a new investor, I figured i would reach out to my BP family. I look forward to hearing from everyone, Thank You sincerely.

[Aaron Mazzrillo]

Originally posted by @Matthew Horn:

@Aaron thank you for your response. Your post was interesting, and your patsy poker story was amusing. As for my experience, I am a new investor as stated in my bio and recent post. The house is located in the central valley. We all have to start some where right? Even if only $10k was made on the deal, sometimes the best thing to do is to take that first step.  Thank you for the great advice.

 As your doctor, I have determined you are suffering from Got-to-do-a-deal-itice. It is a horrible disease and if it goes full blown (the day you close), you'll suffer sleepless nights, stress, lots of depressing road trips to your project, lost capital, and most likely be stuck with a rental house you won't want to own. Best case scenario, you'll lose a significant amount of money and have a great story in 10 years... if you stay in real estate and succeed. If you don't, you'll have a horrible story that you'll tell anyone and everyone that ever tries to talk to you about investing in real estate as you try to convince them it is a scam. The flashbacks will be crippling. 

It's not the ones you don't buy that hurt you. I'm also doing a rehab on a 2/1 built in 1937 right now. It is about 3 miles from my office. My rehab budget was $30K when I started. I've spent $32,400 so far and there are a few more "surprises" coming, I'm sure. But, my deal doesn't have a thin margin. I paid $140K and it is worth $229K. I also converted my 2/1 into a 3/1 which has a much larger buyer base.