All Forum Posts by: Aj Bowman

Hi Everyone I have a question on how to get the price I want on a house. For example if there is a REO house listed for 100k and I believe that it is only worth 80k. What are some ways for me to get the bank to accept that offer. Not sure if this would happen but if I offered 60k and they said we will meet you half way at 80k. Strategies like that. Thanks

Thanks Everyone 

Originally posted by @Brandon Hall:

@Russell Brazil and @Mark Creason are right on the money.

@Aj Bowman since you are going to be flipping, and assuming that's your main strategy, 1031s will not be available to you as the flips will be considered inventory and the profits subject to ordinary income rates and SE taxes.

 Ok Thank you for the clarification.  Do you know what those rates are?

I thought once I sold a house after a flip I could use a 1031 to put my profits towards my next house so I wouldnt be taxed until I sell my next flip.

Hi Everyone,

I am trying to understand how the property gain taxes work in Maryland. I know I can use a 1031 to work around the taxes for a little bit but I will using a private lender so I don't believe that will be an option for me in the beginning. I guess what I want to know first is how much are the gain taxes going to be in Maryland? Also are these taxes something I should put into my number in the beginning. My ultimate goal is to profit 25k per flip so should I push my goal up to 30k so I will get 25k after taxes or should I just keep my goal where it is. 

Thanks 

Originally posted by @Evan Roberts:

AJ, As an investor/contractor/agent in the MD area I will tell you right now that 15k for a 1500 sq foot house is just not even close to reasonable in this area. Infact that's not really reasonable for any area where you're dealing with a house needing a full renovation. You can easily spend 10k on plumbing and electrical overhauls (I'm going through that right now on a renovation). There really is no quick and dirty formula to use as it varys house to house but an experience investor agent should be able to tell whether it's worth your time or not. 

That being said...MLS is a tough route to go. Even as an agent, I don't even bother with it too often as it's just so competitive. Direct marketing or a wholesaler in the area may be your best bet. Happy to help if you have any questions as you get going.

I appreciate everyone answering all my questions. But I thought that 15k for 1500 sq ft was kind of low but I was not sure because I am just starting. What is the best way to find a wholesaler in the area? I was thinking that it would be my next step but wasn't really sure where to start. 

Originally posted by @Russell Brazil:

@Aj Bowman if you (or your contractor) are ballparking estimates off of pictures....be prepared to lose a lot of money.

Your agent should be able to point you towards the areas that are primed for flips. There are many in our area.

 I was just getting a ballpark estimate to see if it is worth it to go look at the property and at that point I would get a real estimate. I would never get an estimate based off pictures. 

I am not really sure if my agent is looking in the prime areas but I get a list everyday based of the things I preferred. If you don't mind me asking, what areas should I be looking for.

Originally posted by @David Friedman:

For me, a 1,500 sq ft house means approximately $15,000 in rehab. My rule of thumb is, whether it is broken or outdated, you will need to replace it. At auction you can't see the inside, but with risk comes reward. To tell what a home's condition may be on the outside, look at how they take care of their front yard. That will usually give you a good indication without even stepping foot inside.

Does that 1,500 sq ft for 15000 work for you most of the time or will it be more or less based on the area you are in? I have a friend that is a contractor and I want to use him all the time but I haven't gone to a house to do an estimatant yet. I was looking at a foreclosed house built in 1929 that was 2200 sq ft 4bd 2ba that was pretty beat up and he gave me an estimate looking just at pictures, max 45k. Does that sound right or is that a high price?

Hi Everyone, I am currently looking for my first house to flip in Maryland. Mostly concentrating on Montgomery Frederick and Carroll counties. But I am struggling to find a house. I am trying to stay away from auctions for my first flip to be on the safer side. However I am getting the feeling that I might need to go that direction. I have a real estate agent looking for me and he sends me houses everyday. I'm just looking for advice to help me improve my search. Any suggestions? Thanks

I am really new but for me it's time freedom if that makes sense. Having the time to do the things I really love to do in life like spending time with family and play sports. Having the ability go anywhere and still work and have that steady cash flow. Now my goal is to have that financial freedom as well but I don't make that much money now and I'm happy so making a bunch of money in the future is not going to make me any happier. Also I love a challenge. Trying to figure out where I am going to get my next house from or how can I fix it up and sell for a maximum profit. That sense of accomplishment in the end is great as well.