All Forum Posts by: Devin P.

@Guifre Mora

Thanks everyone. That’s helps a lot.

Hello. The "search" option is not working for me at the moment, so I wanted to get some insight for a topic I am sure that has been discussed before. 

Basically is there typically a difference in cost on closing costs for a cash out refinance? or is it essentially the same (roughly 6%) as when I originally purchase the house? Just trying to accurately run some number scenarios.

I have a bank willing to lend 75% and I am waiting to hear back on my scenario, I just want to know what's normal.

Thanks!

Originally posted by @Steve Eagland:

@Devin P., wouldn't happen to be 87 Hackberry Dr would it?  Best of luck with the flip!

Yeah man! I'm loving this house so far. Super small house with big gains. Very easy flip for sure. Needed new septic, roof, windows, interior, adding second full bath. It will be nice when its done.

You cant breach contract if it's not in the contract. I wouldn't waste too much time or money investing in their threats.

Yeah Id be interested. Just landed my second flip in Felton DE, so that will keep me from doing anything else for awhile, but Id be interested in meeting up sometime.

Anyone that has done BRRR, can you give me some insight as to what closing costs, fees are associated with a cash out refinance? Are those costs typically added to your 30 year or new loan, or are they closing costs that your are expected to pay as if you were purchasing the property? Just trying to calulate what percentage or cost I should expect for the refi portion of the calculator.

Thanks!

From Middletown DE. Just successfully flipped 1st home in Wilmington DE (4 Paisley Drive in Hyde Park). Would be interested in meeting up if those investing meet ups are still going on locally. Currently looking for buy and hold (BRRR).

Nevermind. It’s holding costs. I paid out of pocket. 

Some please let me know if I'm going crazy or just making countless errors in my math.

I am confused beyond anything on my current situation and would much appreciate some help. I just flipped my first home. I used the Flip Calculator in Bigger Pockets and ran numbers time and time again. Every time I run them I get final profit of around 17,000. It was originally 30,000, but new comps and renovation expectations increased the cost to flip the house. I am just glad we didn’t loose money. But I am completely dumbfounded by the number now and have no clue how we are ending up with more than we anticipated.

Long story short we should be getting 17,000 and instead we are still ending up with around 29,000 and I have NO idea how. I assume it has something to do with the loan we used (Fannie Mae Construction Loan). We had roughly 23,000 tacked on top of the loan for construction renovations. They

Made checks out to the wrong companies, and took over a month to attempt to send me new checks so I simply used my own money instead of utilizing the draws from that escrow. Since we never used that escrow, we are being cut a check in the amount of 23,000.

The purchase price was 170,000.

Closing was 9,000.

Renovations were 44,000.

Sale was 272,000.

Closing at sale was 19,250.

We put 20% down on the property. Should have been 34,00 but ended up being 38,000 with the construction costs tacked on. The total loan was 193,000 with 38,000 down making principle of 155,000.

After paying off loan for 8 month the principle is down and total payoffs net to us getting roughly 99,000 back at settlement today.

25,000 of that goes back to family for borrowing money.

43,000 for renovations

25,000 is what I put into the property of my own money

That leaves 6,000 which for one isn’t the 17,000 that the calculator computed so I assumed I made an error when typing numbers into, yet I just used the same numbers I provided.

Holding costs were roughly 1700 for 240 days.

Here’s were I get even more confused. So the profit is 6,000 PLUS we get the draws back in a check in the amount of 23,000 which totals 29,000.

I am lost in the numbers and am not sure if I am missing something or what happened, but we started out with 25,000 and now we are ending up with over 50,000. I am not complaining, I just want to know where the hell the money came from in this scenario and to do it again if it worked to our advantage. Did that money come from somewhere that I already put towards the property or am I literally making more money than I should be? I've been at this for hours. I know the secret is in the construction loan.

I certainly hope it gets to the point where I can just simply paint. I agree painters are WAY too expensive, and I actually don't mind it. My wife loves cutting in and we kind of make it a competition to see who can make the straightest lines lol. It does take a toll being away from my kids though, since the whole reason of investing was to spend more time with them (ended up being the opposite). I am not naïve in thinking that was going  to be instantaneous, and I think that's where a lot of new investors loose interest. I can certainly see others quitting after the amount of work that house was. I learned a lot about the loan process for construction loan and dealing with contractors, so that's a huge plus.  The more I feel like I know, the more I know I'm not getting taken advantage of by someone who knows I'm a newbie.

Originally posted by @Christina Linn:

Originally posted by @Devin P.:

I just flipped our very first house. I was willing to do some of the work ourselves. It had mold, termite damage, water leaks, typical stuff. We contracted out to do the roof and new windows, all new HVAC, and updated the electrical.

Demo, Framing, plumbing, drywall, tile, finish work, re-finishing hardwood floors, complete bath gut, adding additional full bath, kitchen gut, landscaping, staging all done by yours truly.

I was expecting to take care of the majority of the tasks due to our budget. Purchase was 170. Repairs 45k. ARV 275.

We have 2 younger daughters. I watch a lot of youtube videos of hands-off investors and listen to all the podcasts about investors not knowing how to change a lightbulb, listen to podcasts about 20-30k total rehab for flipping a house hands off and just simply don't know how that's possible with some of the quotes I received for the work. If I was hands off, that house would have easily been 80k in reno cost. What boggles me even more are the people that say they got them off the MLS. It took me a year to have a deal accepted with all the bid wars we got into.

I can say that I have taken what was meant from this opportunity, which was a learning experience. I went into this happy to even loose money as long as I gained experience. 4 months straight of that on my days off work though definitely took a toll. Its HARD work. I think people get into this thinking they can successfully be hands off and still make money on their first few deals. I have a fair knowledge now on the actual costs of things and have gained a small list of contractors that are worthy for future business, and others that I blocked their number.

Overall, I'm here to make money, not sit on my ***. Getting dirty soon again.

 That's an awesome story!  It does take a lot of work and knowledge; you will only gain more if you continue.  I do all our renovations with my toddler in tow, which is much more stressful than 3 years ago.  It is definitely worth it to me to have done all that work, but we are fixing up a recent purchase right now and I am sitting on a bed in another rental typing this text while my contractor is finishing up at the other house!  It's taken a lot of time and patience - a lot of learning - to get to this point, but I can honestly say that it's more than worth it to be paying a few grand for this guy to lay this tile and build these walls!  My son and I took a trip for the first couple days of construction.  I will still paint, because I feel like painters cost WAY too much, but if you continue down this path it's likely that at some point it will be more worth your time to find deals and spend time with your family than get dirty and sweat.