All Forum Posts by: Abraham Hodroj

@Abraham Hodroj, fix and flipping (or living in then eventually flipping or renting out) a house while you occupy it is definitely a way to go. I have not done so myself, but I have done a few flips before (and a lot of rehab and long-term holds.) Keep in mind that, generally speaking, the more work that needs to get done the more profit or equity capture there is.

From my understanding you can get FHA loans for as little as 3% down. I'm not sure what you personally qualify for, but if you can qualify for such a loan, it's often a great first-timer option. You need to pay careful attention to you costs however, both in terms of whether you can cover the cost of the mortgage and also whatever rehab, maintenance, property taxes, insurance costs you will have as well. You should still pencil everything as if it is strictly a for-profit flip. That's the only way you'll truly know if what you did actually made worthwhile money or if it was just a way to acquire a house that was fixed to your tastes but for only a minor discount.

Off the top of my head, things to include that often aren't considered by some newbies:

-carrying costs (if the goal is a long-term hold then flip as opposed to immediate flip, you can buffer some or all of this with some rental income)

-selling/closing costs (I like to use 8%, which may be slightly high)

-self-employment tax on your gains

-contingency or slush fund (for when your expenses are higher than you expected--this can happen often)

Hope this helps.

Wes thanks for your great input. FHA should be fine with 3 percent down. My concern however is that FHA won't approve a non move in ready house if i'm correct or at least thats what my RE agent once said. She either wasn't interested in helping me find a fixer or its true.

So prior to getting an FHA on a property i have to figure out how to acquire the property(finance), fix it and prep it so that i can get an FHA? That is my question if you or others can chime in.

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Hello BP

A quick intro as this is my first post!

I'm a new investor from Anaheim, CA. I have been trying to educate myself on REI and have learned a lot thanks to BP. Podcasts, forum and books have been incredible, i would have never felt as ready as i am if i haven't found you guys!

I had a brief real estate experience in my early 20s (2005-2006) and the rest is history given that it was family and the 2008 crash.

I have setup a website, ordered business cards, registered to the next REIAs in my are (irvine, Inland empire) , read a lot on direct mail and still reading. Plan to launch a campaign in the next 2-3 weeks.

Sorry if the intro was long. Now to my question:

My wife and i have been wanting to buy a house for about a year now. We can easily get approved for FHA. I've looked briefly into 203k loan but i don't like all the stipulations especially if we want to do some of the work given that they require licensed contractors.

Would it be a good idea to find a fixer and learn from it since either way we are needing to buy a house? and it would be nice if we can rehab it to our taste and earn an experience that if proven costly our exit strategy is in place (living in it)

Also what are our financing options? We have about $30k to spend on a new house(not including credit cards) but i don't think that is enough to get a HML to finance for example. Fixers in our area would be at least $300k+ . Ideally we would fix and then get an FHA or hopefully a conventional if there was enough equity.

Any input is greatly appreciated.

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All Forum Posts by: Abraham Hodroj

Abraham Hodroj has started 12 posts and replied 32 times.

Post: Is having my first flip be my home a good idea? and how to finance?

Post: Is having my first flip be my home a good idea? and how to finance?