All Forum Posts by: Charles White

@Nghi Le Thanks for your input! valuable advise. I'll PM you

@Account Closed , I think that many big brokerage companies have a team of agents that specialize in foreclosure auctions. What they say is that they go to the field, that they even knock on doors and see if the property is vacant to get accurate numbers. I'm just a little upset about the numbers they gave me, it seems that in this case, they didn't go there to get a clear picture of the conditions of the house and that they estimate the ARV comparing this house with properties that have higher sqft and had other add-ons. Regardless, I shouldn't fall for it and do my due diligence.

@Brian Pulaski , definitely, the best case scenario for me at this point will be breaking even,  if I'm lucky

@Youdo Thirakul , market up here is crazy. Appreciation in some areas are making really hard to buy good deals, that's the reason many investors are considering buying foreclosures.

Thanks for the good wishes 

@David Dachtera

Yes, David, I did explore that possibility, houses in this area appreciated 12 % past year and this market is HOT. However, after all my calculations it seems that I will end up with negative cash flow anyways. Playing the appreciation game while having cash negative cash flow could be a risky move, but I haven't discarded yet. I will for sure consider doing a lease option, I've got to run numbers

@David Weintraub , I won't mention the name of the company since I'm planning to go back to them so they can help me sell this one for the price they told me it was going to sell. 

Also, they make every investor sign documents that frees them for any type of liability. 

What I can say  about this experience is that regardless of the numbers "this experts" come up with , it was my responsibility to double check the numbers, visit the property and do my due diligence. I imagine how bad things can go for someone that has 0 experience, at least I new the basics. 

Thanks David!

@Thomas S.,

Definitely, I'm not here to leave. I'm stubborn as mule. I will consider this experience as my  cheap tuition  to learn and master real estate

@Robert Callaway, I thought about this possibility too. However, I don't think that this would be an attractive deal for any real estate investor. House looks pretty bad at his point and if i sell it to break even I would ask for 370k. Good idea about the advertising choosing fixtures , I will consider this possibility. Thanks Robert

@Albert Bui , I think I night be able to finish this flip with 35k , totaling 68 k for repairs+ 25,200 for realtors + taxes and other closing costs I basically end up with negative numbers even if I represent my self. I'm curious about your calculations could you share with me? 

For the refinance/rent  , you are right! Cash Flow will be negative too. 

Thanks for your input!

Hello BP members,

Here a newbie from WA that is in trouble. After studying for many months the possibility of buying a house through a foreclosure action I finally did it, and even though I knew about the risk and repeated my self to not make any of those mistakes,  I made them. I'm looking here for a sincere and helpful advice. 

On July of this year and with the help of a bidding company I bought my second flip. This company charged me 3% to represent me in the auction and gave me an overview of different foreclosed properties in the area. They present me this numbers for this house: ARV 460K, rehab cost 40k, decent condition house according to them in a B area, hot market, min bid 300k. This company presents this numbers to the investors one day before the auction, so with the pressure that I had to make a decision and since I have been trying to buy a property for many months without results I made my bid. Result, I got the property for 309k. I was excited since the numbers presented to me made sense, I was hoping to make a decent profit. Next, the day I went to see the house and it was basically a teardown! 7ft Blackberry bushes, leaking roof, carpet had feces on it, wood paneling that was covering a textured wall positive for asbestos, and many many other things that made this house a *hole. Oh, I forgot to mention I got a hard money loan at 12%, 5 months, 2 points with 10% downpayment.

Fast forward to today, new roof, updated electrical system, blackberries are gone with a nice grassy backyard, new furnace, new plumbing, and other things that just keep adding up totaling almost 33k. On the administrative side: payments to the hard money lender, water lien that didn't appear on records for 3.5k. Administrative matters were also on my way; city permits that take 8 weeks to be approved (I haven't even got the building permit yet, and it's already 8 weeks ), labor here in WA is expensive and contractors are busy. Anyways, to make it short, I don't think I will be able to finish in those 5 months and according to my calculations to get this house in a decent condition I will need to spend another 35k ( cabinets, floors, appliances, doors, trims, light fixtures, driveway, siding, drywall, granite countertop) even after that and after seeing how the market is behaving I think I could sell this house for 420000 max, not the 460k I was told. Also, the less I spend the less I will be able to sell it for. 

So at this point, I'm wondering what to do. Should I continue and pay 1 point more to the lender to extend the payment period to finish this property, sell it for 420k breaking even if lucky? Should I try to sell now, but who would like a house like this or maybe cashout refinance after done and rent it out for a while ( rent in this area for this type of property is from 1900 to 2k a month) leaving some money on it? I would really appreciate your output/advice/ creative solution. Thanks