All Forum Posts by: Aimee Piacentino

@Aimee Piacentino - Hi! I'm a cash buyer up north in Boulder. I also grew up in Loveland and Larimer/Weld counties. Some good info here. Some, not so good;) Always buy at a discount. Otherwise you are gambling. If you can find a deal that is 70% (or less, but realistically in our market..70%) of ARV - necessary repairs and holding costs, you can wholesale that, easy. Or keep and rehab/flip/hold for yourself.

I started out wholesaling and doing creative financing.  If it truly is a deal, it will be gone in hours so long as you have done your due diligence and know current FMVs.  If you've already been wholesaling, keep doing it! Make your buy criteria very strict as the market softens and increase holding costs.  But remember, the front range is still fairly low on inventory.  I'd consider partnering on your next wholesale deal and happy to guide you through your first flip.  :)

Hey @Aimee Piacentino! I don't want to reiterate what has already been said here, but you are definitely in a good spot to complete your first flip with being in the wholesale and construction business. You will never be fully protected from losing money, especially on your first deal, it just comes down to minimizing risk as much as you can. And it seems you already have the rehab budget estimating in line, so your biggest item will be estimating ARV, and as some people said, just adjust for a 10-15% decrease just in case. ARV is the number one killer of flips, as you may buy right, renovate on a budget, and be within your timeline, but if your ARV is off there is nothing you can do. Even on a refinance. Personally, I am still flipping and helping numerous other clients flip as well, just tightening up our UW.

One thing I would ask yourself, and it's something I deal with clients all the time. If you are already wholesaling, and working in the construction industry, is it the best use of your time and energy to also add flipping onto the plate, as well as compare the whole sale fee you could get on the property, vs the profit on the flip? You may find the additional profit isn't worth the extra 3-4 months of time and effort, especially if you are working it. I would make a very tight buy box for your self and what you would flip, and if something isn't in that box, then just wholesale it.

Hi hope all is well, I see youre trying to start the RE investment journey. I like the area of Fort Collins, I work up all and down the front range and find that Fort Collins always has some good deals. The bad part of trying to time things, is you usually miss the best time. So I always suggest when investing do it when it feels best for you and your situation.

@Aimee Piacentino You really won't start learning until you get into your first deal. All the "textbook" learning from reading forums, going to meetups, etc. is good. BUT, experience certainly trumps everything so I wouldn't try to have all the answers at this stage. Once you do your first flip you will likely look back and realize how little you knew prior to that!

The best option would likely be some kind of private hard money where there are less hoops to jump through compared to Kiavi or Fund That Flip. We've always gone the private route for this reason. You are also more likely to get 100% financing or even 100% + reno funds with a private lender. But, this really depends on how good the deal is that you find and how well you buy it. If you are buying a property for 50 cents on the dollar (ARV) then there isn't a ton of risk from a lending standpoint and doing a 100% loan isn't out of the question.

In terms of your last question, we generally shoot for the higher of $40,000 profit or 10% of the ARV. But this is subjective and everyone might be higher or lower than this. Flips are a lot of risk and work and we want to be compensated accordingly.

One last thing to add, is to be laser-focused on the ARV when doing your numbers prior to making an offer. This is the one thing that can make or break a deal if you get it wrong. And this is true ESPECIALLY in the current market we are in. If in doubt at all about the ARV and where it'll be a few months from now, drop it lower. Way better to miss out on a deal because you offered a low price than to be caught with a deal that loses money or breaks even. On the first deal I did, everything went wrong and we made tons of mistakes, but the one thing we didn't mess up is the ARV and how we bought it. We still ended up walking away with almost $50k despite all our errors. Be ultra-conservative on the ARV!

Shoot me your next wholesale deal, and I can walk you through it as a potential partner. I'm still flipping, but I'm being conservative across the board. 

No one has a crystal ball to give you a precise prediction of where home prices will be in the future, so this is part of the inherent risk you're taking on. Different people (in different markets, with different risk tolerances) will probably tell you different numbers for how much they would discount current ARV to guess at future ARV. If you want to be really conservative in your numbers, assume that banks doing conventional financing know a thing or two from all the prior economic cycles and have learned to only loan 80% of the property value in case values fall. If you're that conservative you probably will weed out a ton of deals, though, so if you really want to do this you probably need to be willing to give up your profit (and just make sure you break even) under your worst-case assumptions. You should also definitely make sure the numbers work to at least break even on other exit strategies, like renting it out.

It sounds like you maybe over thinking this. If you are wholesaling you know how to find a deal. Which is the biggest part, you make the money on the buy. Next is estimating cost, and your construction experience should help you with that. Financing is just shopping around until you find the terms you like. With that said our biggest mistake were bad contractors and taking to long to finish even then we did not loose money.