All Forum Posts by: Copeland Duhon

Originally posted by @Robert Leonard:

Are you paying the asking price for the house and the lot?

NO and NO. 

What is the flood zone of the lot?

This is an interesting development that we are currently researching. Literally half of the lot is in a flood zone and the other half is not. 

When you say "we" estimated moving and setup costs, who is we? Was a house moving company involved in that estimate?

Yes, we got multiple estimates.

$130-150k seems like a wide range? What are similar aged/style 1,000 sq ft houses selling for in the area of the lot? That will help you narrow down your ARV.

This has been difficult to pin point. the lot is in a rural area with no restrictions, However, most of the houses around are on slab and quite a bit bigger. There are a couple nice mobile homes around but all double wide. The house is smaller and on piers but as far as curb appeal it matches the neighborhood well.

To your questions:

1. Somebody in the transaction needs to know and understand real estate contracts to get those things right if you won't involve a realtor.

2. When you get your contracts with each seller (house and lot) the title attorney will do the searches for liens and other title-related concerns, not you.

3. A lot. Every usual concern and then a whole set of house moving related concerns. A very competent house moving pro, Ed Smith, Devillier House Movers, can advise you about those concerns. You can find him with an online search. My post was blocked when I included his phone number. :-) NOTE: I have no business affiliation with this person/company.

Thank you for your response!

@Joshua Saunders great advice! I will put that on the list!

@Andy Bauman I am in Lake Charles, Louisiana.

We are looking to get started on our first real estate deal. We have found a really nice house on piers for 10k (to be moved) 1000 S/F living, as well as a vacant lot for $40,000 (seller pays closing and water is already there). We estimated moving and all set up costs to come in around 30k. This includes pad, sewer, electrical, HVAC etc... this leaves us with 20k-25k for any renovations that might be needed after moving. We estimate ARV to come in around $150,000, but have prepared to be ok with as much as 130k.

Thats the deal....... here is the question.

1. The house is For Sale By Owner and they have had really bad experiences with realtors. They prefer to work through this without one. What all do I need to look for and make sure is in the contract so I don’t miss anything?

2. How do I look for liens?

3. Is there anything we might be unaware of or need to look out for with this deal?

@Andrew Postell at the moment I have $30,000 of my own money and I am talking to the bank about getting a $50,000 unsecured line of credit. This will give me $80,000 dollars total to complete my first deal. It doesn't seem to matter how you buy though. Seems you have to let it season no matter what if you want to refi based on ARV?

If you purchase a home with cash do you still have to own it for 6-12 months before refinancing?

@Ryan Blake that was very informative and precisely what I needed to know. I am currently talking to the bank about an unsecured line of credit to make up the rest of the funds I need for my first deal.

Thank you all for all of your help! It is greatly appreciated. I still have so much to learn and y’all have been GREAT! Thanks again.

@Mike Dymski how do they use conventional lending? We have been told the same thing by everyone so far.

1- We don’t finance flips.

2 - If you finance as primary residence you have to hold it for 180 days.

3 - We only finance rental properties if they are “move in ready”. Anything that requires major renovations does not qualify.

I even have $30,000 of my own money to put down......still no deal....

So we found what could have been our first deal. Everything checked out and we were ready to move forward. After talking to multiple lenders we quickly discovered that conventional lenders are not set up to deal with investors. In fact it seems to be set up to discourage investors. Now we are back to square one trying to figure out how to finance this project. It seems hard money is our only option but how does one justify paying 10+%.

That is what I have noticed thus far. My job requires me to travel so that is an added complexity in all this, but we want to get started. Would you say it might be a better time to consider flipping rather than renting? There are a few properties that the numbers work for a flip but not necessarily a BRRRR which is what we were trying to do, but I am not opposed to altering strategies until the renters market comes back around.