All Forum Posts by: Charles Whitaker

@Andrew Postell

Excellent information. Thank you Andrew

@Demetrius Johnson

I was taught that if a property has some outlying factor that negatively affects it, to go ahead and reduce 5% off the ARV for each of those factors, just to be safe.

Best of luck to you and I hope you get a sell soon. 

This is my honest opinion:

- The price point is too high given the size (2/1) and location (busy street). This area is mainly comprised of 3/1's or larger so you should have offset the ARV for that when purchasing. Also, being on a busy street would warrant you offsetting the ARV as well. Having both of these against you I would have automatically dropped my ARV by 10%.

- The ARV was artificially inflated (both in your purchase and sell) meaning that you thought the house was worth what an actual "Murray Hill" home was bringing in when you bought it and then you listed it way too high (which ultimately kills your initial influx of buyers). Your initial listing price should have been closer to where you are at now. The point of a rehab is to actually make the money, holding costs are going to eat your profit quickly (as I found out the hard way a few times)

- The house has absolutely no porch. IMHO, I despise homes that have an entry way similar to that one. A covered porch, of any kind, goes a long way. The bathtub surround should have been tile (depending on what you started with). 

- Like mentioned above, this is a bad time of year for home sells. 

- You rehabbed a home in an area that is chocked full of, you guessed it, rehabs. If you are going to do this and plan to sell "quickly" you must have much more appeal AND a better price point then the others.

@Jack Seiden

That is a crazy huge house for just $100k. In any case, an interior paint job of such a huge magnitude, in my area of course, would be closer to $6k.

I recently quoted someone a paint job and replace flooring (laminate) $8k in a 1400sqft house. Location plays a huge role in costs.

if it's a 100k home and carpet/paint cost you >20k...you sir have the wrong contractors. 

https://or.leeclerk.org/LandMa...

That link is for Lee county, not sure exactly where you are located. Find a successful real estate investor and look up their county records; within those records you may find prices (most likely) and a solid list of buyers. Just keep digging and you can find any information that you ever needed. Like Brit ^^^^, you can easily look up his deals and come to a good conclusion of what he pays.

Given that each unit has a electric stove and whatever else is connected you are likely close to pulling 60 amps at times anyways. I would bite the bullet and upgrade, not for $4k though, more like <$3k

@Ned Carey

I figured as much but i had noticed a few deeds where a sizable credit line was obtained while the house (collateral) was ~1\5th the value. Obviously other factors went into that determination.

Thanks for the info

I think your profit after soft costs (why are they soft, they will amount to something quite huge) will be in the neighborhood of ~$18-20k. This factors in purchase cost, sell costs, holding costs, and fluctuations on the repair costs. But kudos to you if you can make that number higher.

I have been looking into a business Line of Credit and have a few questions:

- I notice that some people can obtain a huge Line of Credit based on a very small piece of collateral (let's say a $500k LOC on a $100k collateral). Is this feasible because they are using a business Line of credit? I know HELOC's are only based on the equity position.

- I assume you can use the funds to do as you wish, i.g., purchase a flip and rehab all with the same LOC.

- what are the typical requirements to obtain a business LOC? I notice some lenders require 6 mo's of business activity and at least 50K of annual revenue. How much does your personal credit factor into this loan type? Any other requirements that I need to know?

Any other info would be highly appreciated. 

Thank you