All Forum Posts by: Ashton Cherry

So hard money or no hard money, if I think I can sell for 315k then I need to make sure that my acquisition and construction costs are no more than 220.5k (70% arv) to account for holding and exit costs, profit, and problems. Sounds like I should move a little further down the trough to lower end homes.

I'm really grateful for the quick and thoughtful replies. Mr. Holdman, I really appreciated the time you took to walk through the numbers on the deal and I think I completely agree with your assessment.

After some more research, there is no way I am going to use hard money for a deal like this, even if I could. I also am not looking for a no-money-down deal. If I got a conventional 75% loan on the 205k purchase price, I could float the remaining 125k or so myself to get it to market and hold for 4-6 months. I just don't think thats a prudent use of my capital, especially as a first timer in a tricky market and with a tricky house (one of the issues is creating a master suite from a 1960s style house where the master doesn't really stand out like it does in more modern houses and another issue is creating a half bath to service LR + DR in main hall).

I have looked at FHA financing, both the 3.5% down and the 203k rehab loans, but I am not 100% sure that I would want to live there for the appropriate amount of time. Last thing I am looking for is any problems with any government entity, ever. I feel like I could live there but I don't feel comfortable being obligated to.

Is there a fair offer I could make to the seller to essentially JV with them where they provide the house and I provide the construction money and design program to improve the house to market levels? If I could invest 50k or so on construction only and keep the lions share of the profit over 205k, I might be willing to do that.

However, I have also been meeting with a wholesale broker/investor who is telling me that he likes deals in Richardson, Garland, and mesquite where he buys for 60k, fixes for 20k and sells for around 120k. He, like you guys, heavily advised cutting my teeth on a smaller deal where the buy is in the tens of thousands and the sell is in the low hundreds, even if I didn't do it with him.

I do think theres value here with this property (I am very confident in the 100k spread between the buy and the sales comps) and I just want to be sure I can't find a way to unlock some of it before I walk away entirely.

Thanks again for the help!

Hi BP,

I recently moved to Dallas from NYC to start investing in my own deals and I think I may have found a good one. In the Lake Highlands area of north Whiterock Lake, I have a house under contract for 205k with area comps north of 300k for renovated homes. It needs roughly 45k in repairs from my estimates and I think a total of roughly 125k is needed to complete the deal (includes a 4 month hold and generous allowances for expenses).

I have been looking at hard money and other construction loans and I have a couple decent options on the table. However, what I would really like to do is partner with someone who has done this before to work through the deal together as a learning experience with an even equity/profit split.

I would also really appreciate just talking to a more experienced investor about the deal who might be able to offer some insight - I've noticed the DFW BP community is very good about taking time for newbies.

Thanks,

Ashton