All Forum Posts by: Account Closed

Can you tell us what area this is in and what type of deal this is? Thx!

I think 5% annually is the safe estimate.

Joseph M - I believe that most of my friends are finding their most lucrative deals through their vast network of agents, who themselves are quietly finding distressed owners/sellers and doing deals without ever listing the properties in the MLS. This would be my strategy as well. More "who you know" type deals than fighting out other investors on the MLS.

Hey Matt Devincenzo - great advice, thanks!

Long story short: Bought and remodeled my first house last year and loved every minute of it, so I dove into real estate education last year with the plan being to flip homes in LA. I spent most of my cash on my down-payment and remodel, however, with the work I did (and rising home prices) I have developed a good amount of equity in a short time.

I have been approved for a HELOC of (roughly) 150K, which I want to use to invest. I know this can be risky, but I like risk. My father-in-law is also a very experienced agent and former broker with 35 yrs in the business who has been there to guide me and will do my deals. He has supported the idea of using the HELOC.

I sense that the current tone in So-Cal is one of "buy-and-hold is where it's at, flipping is dead." I personally don't feel like flipping is dead in LA at all, especially in the area I've been targeting and researching. I have several friends with very successful flipping companies in LA. Like anything else, it's all about finding the deal.

However, buying and holding multi-family obviously looks good in this climate too. My wife has a 4-plex she about 12 years ago and makes a nice salary off of. It would be great to build a bigger long-term portfolio. Sadly, with 25% down, closing costs and repairs, even with 150k I don't think I'll have enough to invest in multi-family in LA. Also a little wary about investing outside LA, as I'm not familiar enough with the markets. I know this opens up the world of partners and other types of creative financing.

In the end, I wonder what everyone else out there in So-Cal is finding success with at the moment (without giving away any of their secrets of course!). And if anyone has ever used a HELOC in creative real estate investing?

Thanks in advance for your expertise!!

J Scott - Bought your books last night and got about 40 pages in to the Flipping Houses one. Love it so far!

J Scott - Thank you!

Awesome, thanks everyone.

In my research I've come across several different formulas people use to determine if a flip is worth the risk. The 70% rule [i]seems to be the most used and discussed (?).

While at a workshop recently I met someone who uses this formula:

Figure out ARV.

Deduct 10% of ARV for rehab costs.

Deduct 8% of ARV for all closing costs (including hard money).

Deduct 15% of ARV, which is your target profit.

You're then left with the purchase price.

Does this look good to anyone? Regardless, I'd love to know what formulas work the best for you.What's your favorite "formula" when analyzing a deal?

Roy N. - Sorry about that, I should've been more specific. I'm referring to analyzing a deal for flipping purposes.