All Forum Posts by: Mike Terry

One thing that makes me always feel better about debt and leverage is a good breakdown of your tax return with your accountant.  I just completed my 2023 return and the amount of information in a return can really give you some clarity on your business.  I am in a similar situation to you in that I am in a 100% commission sales job and the number of deductions and the whittling away of your effective tax rate is very powerful once you can wrap your head around the numbers and the big picture. From what you describe I think you are fine and keeping your eye on your portfolio loan to value is key for my comfort.  If you ever found your self in trouble you sell a property and reduce your debt load and obligations.  Continued success,

Mike

Hi Justin,

I am an investor in Michigan, Georgia and Florida.  Welcome to Bigger Pockets.

Mike

This is very ambitious!!! Have you considered bringing on a partner with experience in luxury flips. If I were in your shoes, I would start with a more basic project. My best projects are usually taking a dated home and cleaning it up with interior cosmetic renovations. I always stay away from anything that is a personal choice that one buyer may love an another not care for. Always remember budgets always balloon as do time lines. The bigger the project the greater potential to get off track. It looks like you have a healthy spread from purchase to ARV. I would look at your wish list here and pare it down to necessities to make the project clean bright and sellable. Things like moving electrical panels and specialty mechanicals may not return what you hope for. The biggest impact will be interior paint, trim and doors, upgraded fixtures, bathrooms and kitchens. That is where I would concentrate. Just some random thoughts as I read your post. Best of luck with your project.

Investment Info:

Single-family residence fix & flip investment.

Find this one from a wholesaler. We ha some hassles closing with leins, but we got it sorted out. It's a cosmetic rehab. Junked it out, cleaned up landscaping, drywall repair, texture, paint, new interior doors and trim, new waterheater, new floors in kitchen. some new floors, countertops, new roof, painting cabinets. budget 25k target rehab 6 weeks.

How did you finance this deal?

cash and private money JV

How did you add value to the deal?

new roof, extensive cleaning, cosmetic rehab

What was the outcome?

in Progress

Lessons learned? Challenges?

5 hours a way- distance flip

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

Foudn deal with wholesaler on investor lift.

Hi Abby,

Great post! Congratulations on getting your Real Estate License. It is great to see a young person identify a passion early and life and go for it.  I and my wife, are investors in Florida and Georgia.  Like you we are interested in escaping Florida hot, soggy summers.  We would love to identify some possible waterfront properties in Michigan.  We like value add, would love something with a guesthouse, Lexington and the Lake Huron Shore (Port Huron) area interests us.  I sent you a DM.  Let me know if you stumble across anything.

Thanks,

Mike

I suck at predictions as do most people, but here is my best guess on Florida.  Flat and shallow correction in median home prices.  The vast majority the rest of the nation will continue to see moderate to slow increases in value.  Florida will continue to suffer from much lower affordability due to increased insurance costs and taxes.  The most attractive feature of the state was relative affordability and no state income tax.  That advantage is gone.  People priced out of the state will stay put where they are or try more affordable places like Alabama, Georgia, South Carolina, North Carolina.  Eventually, the affordability gap will close as prices here moderate and hopefully our state government can come up with some insurance crisis solutions.

Hi Chris,

I own a protfolio of single family and duplexes in Valdosta and surrounding counties.  I have been pleased with the market.  I intended on buying here for cashflow and not expeecting much appreciation.  The appreciaition in the 4 years I've owned has been a big positive surprise.  The key for me was finding a good realtor, property manager and banker.  Feel free to reach out if you want any specifics. BTW I live in Southwest Florida also.

I live and work in the swfla market, just south of there.  This is an emerging market for sure.  Please learn about flood and property insurance and get quotes before you make offers, or at least during due diligence.  Also be carefull with septic and wells.  Educate yourself on utility assesments also. all of the above can make a good deal bad fast.

Thre are lots of Ready to assemble cabinets you can purchase and asseble if you are a do it yourselfer.  Search for RTA cabinets in your market.  Sunshine cabinets are good in Orlando.

Your competing with big national lenders that are offering financing with low rates by buying the rate down.  Your costs are fixed and so you probably can't provide discount financing.  Lower your price to match your competition or try the rental route.