All Forum Posts by: Chad Bixby

We are putting 15% down on the home.  The $30k could flex to $35K, but we are pretty confident that $35k would be the worst case scenario as we have run the numbers over and over.  Our estimation tool does calculate holding costs based on what we think the timeframe would be to sell the property (again we consider the worst case scenario), there are no pre-payment penalties, and utilities have been considered in our holding costs numbers.  

Our estimation is that our potential profit from this opportunity would be between $10k - $15k.  Your right about the margins being thin, and even after all of the math and work we have put into evaluating this opportunity, I am just not sure $10k-$15k would be worth the risk (especially on our first flip), so I appreciate your feedback for sure.

@Ashley Pimsner, here are the details of the home

Sale of home = $80,000
Cost of rehab = $30,000
Real Estate Fees =$6750 (max)
Bank Closing Fees (I need help here)
ARV = $140-$150k

BTW, Here is a list of my closing costs

Origination Charges = $2616 (This seems very high to me)
Appraisal = $820 (I know this is extremely high and the bank is making me us their guy)
Consultant Fee-Reno = $415 (no idea what this is for?)
Tax Service = $75 (again... not sure)
Pest Inspection = $215
Title Service & Lenders Title Insurance = $890 (Seems high to me in my experience as well?)
Owners Title Insurance = $265
Govt Recording Charge = $138 (again, not sure what this is)

TOTAL = $5434 in closing costs just to get the loan.I am sure my lack of understanding in all of this is due to my limited experience in getting loans on investment properties, but I just wanted to run this by you guys to see if this seems normal to everyone else?

@Wayne Brooks, you are correct, I should be saying "getting a loan" not "assuming a loan", in the traditional sense, I am getting a new established loan on this property, I am not assuming a current loan.  Sorry for the confusion.

Please see the closing cost outline below.

@Ashley Pimser, here is a list of my closing costs

Origination Charges = $2616 (This seems very high to me)
Appraisal = $820 (I know this is extremely high and the bank is making me use their guy)
Consultant Fee-Reno = $415 (no idea what this is for?)
Tax Service = $75 (again... not sure)
Pest Inspection = $215
Title Service & Lenders Title Insurance = $890 (Seems high to me in my experience as well?)
Owners Title Insurance = $265
Govt Recording Charge = $138 (again, not sure what this is)

TOTAL = $5434 in closing costs just to get the loan.

I am sure my lack of understanding in all of this is due to my limited experience in getting loans on investment properties, but I just wanted to run this by you guys to see if this seems normal to everyone else?

Thanks everyone for the comments!  I have more of the details here.

http://www.biggerpockets.com/forums/88/topics/2220...

We found a rehab in the local area in a good neighborhood surrounded by good schools.  Here are the specifics.

Sale of home = $80,000
Cost of rehab = $30,000
Real Estate Fees =$6750 (max)
Bank Closingg Fees (I need help here)
ARV = $140-$150k

There are comps and homes listed that support the ARV so that I am not so concerned with that. Since this is our first flip, I have done a lot of the math required to make this deal a reality, but I am completely stuck on estimating closing costs (specifically with the bank).

I have negotiated with my realtor a 1.5% listing fee and a 3% buyers agent fee so my real estate closing costs will be roughly $6750.  Our current contract paperwork from the bank is telling me the closing costs to assume the loan will be roughly $5000 which seems extremely high (this is a conventional/rehab loan at 5.6%).

Does anyone have any experience with this that can tell me if $5k closing costs to assume the loan seems high or not, and #2 what do you estimate the closing costs will be when we sell the home?  These are the 2 pieces missing for us to get all the math to work.

And finally, knowing what you know and seeing what you see...  is this a good deal?

Thanks in advance!

Chad ~

We have a home that we are pre-qualified with the bank to purchase.  The loan is a 30 Year Conventional/Rehab loan which is requiring 15% down with an interest rate of 5.6% (which imo seems pretty reasonable).  The problem I am having is in the closing costs to assume the loan which according to the closing documentation is around $5000 (which to me seems extremely high).  There are a lot of what I will call "strange" fee's associated with this loan that is making the closing costs pretty high (and for all I know may be typical for this type of loan).

My questions are:  

#1 Are the standard closing costs for a loan like this typically this high? And...

#2 Are there other lending options out there for me that would lessen the "closing cost" blow?

Thanks in advance!

My name is Chad Bixby, I co-own an investment company (P&C Investment Group).  We are looking for whatever investment opportunities there are out there to boost our company to the next level.

We currently have an opportunity (real estate/rehab) in hand with an established contract with the seller that we are seeking lending options for.  We are already pre-qualified with a large banking institution but are not liking the terms of the contract, so currently seeking other lending opportunities.