All Forum Posts by: Drawyan Zhang

@John C.  I totally agree with your friend's situation. One month my business partner and I went up 3 out of 4 weekends, doing most of the renovation work, it's tough, especially when the profit margin is low.

This is exactly what's happening to me, also. I went to some national banks finally.

 Yes, currently only students.

I live in Long Island and investing in Binghamton and Vestal. 

This is awesome, been waiting for this for a while! I'm in!

Thank you @J Scott and @Joshua Durrin for the quick reply.

I guess this is what I consider the most risky part: Experience.

I've bought two 1-4 unit houses as rental properties around NYC, totaled over 1 million in market value, with the some cash raised from all my close relatives, so I have experience with cash raising, but I don't have much capacity any more due to the holding strategy.

For renovation, both of the houses are majorly renovated and I have relatives as my contractors, low cost and very good job done, so renovation is not a problem.

The only thing is that I have not yet sold a house before, only buying and fixing and rental. And I was planning to get a small flip, hopefully below 100K one. This deal just pops up near me, 10 minutes away, so I went to see it and fell in love with the numbers.

And I think I am still a starter even with two properties in hand, I've never gotten the mindset like the investors from BP. Although I've read a lot of posts, books and listened to the podcasts, but doing it is the hardest step and I am determined to, just don't know if I could try this scale for my first flip.

Here is a deal I see and can't figure out whether to flip it or not, is it too risky? Assuming the numbers are all correct.

1. The house is located in an A+ area, best schools, after repair value / neighbor price is around 1.4 million.

2. The house is a REO and the bank treated mold and took away all the walls/ceiling/floor, basically a shell with only wood studs. No electricity breakers, no water pipes and no gas.

3. Asking price is 600K, all cash, no bank would loan it. So only option would be hard/private money. Property Tax is 1.5K/month.

4. My estiamted repair cost is 200K, maybe between 150 to 200, but just to be safe. Luxury interior.

5. Other cost, including all closing/agent/lawyer... 100K

6. It will take 6 month to renovate, and for fast sale, priced at 1.2 million.

7. Market has been proved that private showing session of this house attracted at least 60+ different buyers, very hot market, so selling should be easy.

8. If I have all the cash needed, which is 600K + 200K + 100K = 900K, and sell it for 1.2 million in 6 month, the return is 300/900 = 33.3% for half year. If I can wait a little longer, selling at 1.3 million shouldn't be an issue.

9. Here comes the scenario, I don't have such amount of cash, and planning to go with hard money.

10. Assume hard money rate 12% and 70% of purchase price + 100% rehab cost, and I am able to get the other 30%.

Now the risk is: monthly interest of the hard money + property tax > 6K, which exceeds my monthly earned after tax income, and I will have depleted all the saved cash for this project. The risk is very high.

The county department of building is notorious in delaying the building permit, meaning that it's quite possible I can't even start the work for the first month or two, waiting for the permit to be issued, (no electricity in the house yet).

Anything else unexpected which causes money will impose more risk on the weak financing.

My question is: Should I pursue this flip? Or should I wait until I got better financial situation for future deals, which won't have that much in this area (this is one of the best flipping candiate in two years in this area I think).

Thank you guys for any suggestions and advice!

Thank you guys for all the warm welcome! Never been welcomed by so many people in a forum, it feels so great!

 Thank you! Wish you a great New Year, too.

Hey guys,

Been reading BP for a few months now and listened to a few podcasts (still listening, and I don't skip any of them, starting from the first), finally confirmed that this is the place I definitely need to hang out more, BP is just so awesome!

I am based around NYC, lived in Brooklyn for almost 10 years, Seattle for 2 years, South Carolina for a while, and now settled in Long Island. I'm a Software Engineer in a tech company and I don't plan to quit any time soon since I loved this field. 

I got two multi family houses around NYC, fixed up, and rented. The cashflow is alright but cash on cash return is low, you know it's NYC, can't even get to 1%. The appreciation is great so far, but after reading all the awesome examples from other members, I feel I am actually not doing the investment right. 

So starting from now on, I'm planning to invest outside NYC and looking for better return rate on cash, and keep reading BP and the books suggested by the community.

Thank you guys for the total awesomeness!