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All Forum Posts by: Chris White

Chris White has started 6 posts and replied 14 times.

Post: Making money using hard money and wholesalers

Chris WhitePosted
  • Investor
  • San Antonio, TX
  • Posts 14
  • Votes 3

@Rick Pozos thanks for the posts and I spent time this weekend going over my numbers from the last deal and saw that the price for the loan was too expensive plus the additional rehab put us in the position to not make anything on this flip.  Other items we did not have our eye on were true holding costs.  I appreciate the comments from everyone that reached out i have some new contacts for future deals. 

Post: Making money using hard money and wholesalers

Chris WhitePosted
  • Investor
  • San Antonio, TX
  • Posts 14
  • Votes 3
Originally posted by @Mark Gallagher:

Chris White

Right off the bat $11K plumbing repair stands out. What exactly was done for $11K. Around here you could put an entire septic system in for $11K and could plumb an entire house for much less than $11K.

 We leveled the foundation and there were (5) sections of plumbing under the slab that needed to be repaired that was $9K and then there was a slab leak with one of the water lines and the reroute was just under $2K.  

Post: Making money using hard money and wholesalers

Chris WhitePosted
  • Investor
  • San Antonio, TX
  • Posts 14
  • Votes 3
Originally posted by @Chance Housos:

@Chris White

If I did my calculations correct you should have made $9K. The loan points are a bit high but other the that everything seems pretty close. What was the plumbing cost from, was it the foundation?

You can make money with both wholesalers and hard money but your profit will be less. I always figure 15% of ARV for closing, selling, and carrying cost when using hard money.

Shop lenders and vet the wholesalers. There numbers are usually off at least $10K one way or the other, especially with the bigger ones. 

 I am going to go over the numbers one more time tonight to see what we didn't account for and thanks for the tip on the 15%.  As I look for the next house I will use that to help see the numbers before committing.  

Post: Making money using hard money and wholesalers

Chris WhitePosted
  • Investor
  • San Antonio, TX
  • Posts 14
  • Votes 3
Originally posted by @Jason Hirko:

@Chris White I'm curious what were the wholesalers' estimates of ARV and Rehab? Also, your rate is not particularly good. Once you get a few profitable flips under your belt, count on that cost going down by 2-4%.

As for the $5,000 down - doesn't that get applied at closing? So it wouldn't add to your costs, just an unpleasant way to buy a property?

Wholesaler estimated ARV to be 230,000 and rehab to be 35K. Yes you are correct the 5K gets used as escrow at closing. I doubt I will use that lender again.

Post: Making money using hard money and wholesalers

Chris WhitePosted
  • Investor
  • San Antonio, TX
  • Posts 14
  • Votes 3
Originally posted by @Mike Hanneman:

Unexpected repairs hurt you for sure. Why did it take so long, almost 5 months to finish and flip? Did you account for holding the property for that long?  

 It took 30 days to close on the house when we purchased it, rehab was done in about 60 days and it took almost 10 weeks to close. We planned on having it 4 months.

Post: Making money using hard money and wholesalers

Chris WhitePosted
  • Investor
  • San Antonio, TX
  • Posts 14
  • Votes 3

Yes this particular group if you want the house you secure it with a $5,000 non-refundable deposit.  When the house closes the $5K is used as escrow money.  OK I am out to learn something here and would agree that the rehab got us here are the original numbers that got us started.

Purchase price - $137,500

ARV - $230,000

Est Repair - $35,000

Loan had 4% origination, 11.99% loan amount $150,000

This is where the numbers ended

Sold for - $229,500

Total repair - $49,000 - loan allowed for $26K available for draw which was used. We had $11K in plumbing repairs that we not anticipated.

Carrying costs  - $10K

Closing costs  - $15K

Purchased the house end of Feb and sold it today, got a full price offer within 8 days.

Let me know if this helps.

Thanks,

Post: Making money using hard money and wholesalers

Chris WhitePosted
  • Investor
  • San Antonio, TX
  • Posts 14
  • Votes 3

So we closed on selling our second flip today and both deals were with a hard money lender and a wholesaler, at the end of the day we lost money. We thought we had made a small profit on the first and had rolled in to the second and today doing a final accounting of the numbers the loss was clear. I went back to the HUD's for both properties and realized that we did not account for the large fees for closing and that affected our profit from the start. If you have dealt with a wholesaler before to get the house you have to give a $5,000.00 non-refundable deposit and then go get the loan.

We are just starting and have a small amount of capital to work from, we are considering a shift in strategy but my question is has anyone made money working with a hard money lender and a wholesaler?  I would be interested in learning what made you successful.

Thanks,

Chris

Post: Is teaming up a good idea?

Chris WhitePosted
  • Investor
  • San Antonio, TX
  • Posts 14
  • Votes 3

Chad thanks for the advice it makes a lot of sense. 

Post: Is teaming up a good idea?

Chris WhitePosted
  • Investor
  • San Antonio, TX
  • Posts 14
  • Votes 3

Alright first deal is done, money is in the bank and enjoying a nice glass of wine! I am looking at doing the next one and a friend reached out showing interest to possibly partner on a future deal. I am looking for pros and cons for teaming up with someone. I will say from my perspective they have capital that would allow us to work on a larger house with a higher ARV.

What experience do others have and how can I make it a success if we did go down this road?

Thanks

Post: Wholesalers

Chris WhitePosted
  • Investor
  • San Antonio, TX
  • Posts 14
  • Votes 3

Hi,

I am in the San Antonio area and I am looking for some wholesalers, PM me if you want to work together.

Thanks,

Chris