All Forum Posts by: Eric Jackson

Hello all,

I have what is most likely a two part question for all you in the Northern Colorado market.  In the efforts of finding fix n flip deals in the various small and large communities in Weld and Larimer counties, I'm curious if anyone can recommend a solid wholesaler(s) in these markets?  I imagine the deals are pretty slim in quantity at the moment, but I'm looking to connect with any folks who have made their profession finding deals along the Front Range.

Also, I spend most of my time in Fort Collins and I see a few bandit signs around town, but have been impressed with the recent advertising campaign of a local investor on quite a few yellow bus stop or street signage locations around town. No idea on the success rates or cost, but it's quite a noticeable effort around most of town. For those that are continuing to hunt for deals in this competitive market, what forms are you finding to be successful for your niche? MLS, Direct mail, pre-foreclosure, probate, etc.

Thanks for any thoughts you might be able to share and I look forward to connecting more down the road.

Eric

Tim Harris Congratulations Tim! I'd love to see the numbers on your success. Any before and after pics? Did you complete most of the work personally or contract? On the search for your next flip? Keep at it!

@Michael H.  Looks like a great project.  Curious how you came to find this deal?  Also curious how different the final sales price was from both your original estimate when completing your deal analysis and your initial list price?

Thanks for sharing!

Looking for the BP community's feedback on a couple topics in the short sale process, specifically related to a property I'm working through.

Here is a little context to the situation.  Seller is my father (please continue reading).  Property was refinanced in 2007.  Property is the seller's second home which has been mostly vacant for the past 7 years.  The mortgage payment has not been missed in those 7 years.  Property condition is not move-in ready.   Needs a pretty decent rehab ($50K) to get back to market value.

• Intent vs. legality of arms length disclosure
  • My understanding is that the intent of the disclosure is to avoid mortgage fraud by allowing a related party to purchase the home at a deep discount then reselling or renting the property back to the original seller.
  • The affidavit is not only a disclosure of information but prohibits the buyer to be of relation to the seller.
  • The intent of my purchase will not include the seller being involved in the property going forward at all (fix n' flip or rental to an unrelated tenant)
  • How does the affidavit apply to an LLC buyer?
• Seller hardship and financial status validation
  • Through my research on the Short Sale process I understand a seller will need to submit a package to the bank that will be used to understand the seller's ability to continue paying the mortgage as well as the properties value and position in the market. (W2's, taxes, paystubs, financial statements)
  • Seller has ability to continue paying the mortgage.  I'm assuming the seller would need to show history of inability to pay the mortgage (2-3 months) before submitting a package for short sale to the bank?
  • What type of debit to income ratios or other personal financial metrics do banks use to evaluate a seller's hardship position?
  • Using the 70% rule, the remaining mortgage on this property is about 20% higher than the formula would drive.  I'm not looking for a 50% rule price for the bank to accept.

Just trying to understand if there are both legal and ethical means to move this deal from good to great.  I'm leaning to probably not, but I'm curious on your feedback.

Thank you

@Cory Binsfield Thank you for posting this article and congratulations on your success!

Have you considered writing a blog specific on your build-up story?  I'd love to hear more about how you processed through the various stages of your strategy, how you selected your team, how you found the 97+ deals that you eventually acquired for rentals, your financing strategy, etc.  Although you probably executed many great, established principles, I find people's story's and what worked specifically for them extremely powerful.

Continued success for you!

Does anyone on BP have experience with Cody Properties in St. Charles?  They appear to be a family based, volume rehab/flip as well as buy and hold investment company.  I plan on reaching out to the them, but was hoping they might be active on BP or if anyone has any direct experience to share.

Thanks!

@Maggie L.  Thank you for reaching out!  I will message you offline but I appreciate the recommendation on joining the local investment groups.  I haven't yet although I have received a couple good recommendations.  Are you active in any of the groups?  If so, which might you recommend?

Talk soon

@Gordon Cuffe @Terry Kerr  You've got mail!  Thank you both for reaching out!

Hello fellow Missourians,

Are you investing in or around St. Charles County Missouri?

Are you or do you have an investor friendly agent?

Are you or do you have a good residential property management company?

Are you or do you have an existing relationship with a local portfolio lender?

Are you or do you have a good contracting team to focus on fix/flips?

I'd love to connect! As part of my REI goals, I am looking to develop a team focused on the St. Charles County market with the objective of acquiring distressed properties, performing rehab, and holding for rental income. Why St. Charles County??? Well, a few reasons.

• This is where I was born and raised and I have an existing network of friends and family in the area.  I also travel back for that same reason a couple times a year.
• As a Midwestern, small college (Lindenwood), suburb of St. Louis there are more opportunities for higher cash on cash returns for buy/hold strategies
• My local market, Fort Collins, CO is very highly valued and extremely competitive due to the double digit appreciation we've been experiencing.  Leaning towards focusing fix/flip in this market and funneling cash into buy/hold properties in St. Charles for a period of time

I'm looking forward to meeting those involved in this market and hopefully establishing mutually beneficial relationships! 

Eric

Good points on the rehab estimate.  I am going to begin a more detailed budget and post that this week in advance of the trip back over Thanksgiving.  I'm also planning on taking care of many of the items myself through a week of vacation in late January if possible.  Line up contractors during that time for the items I can't take care of; mudjacking, carpet, etc.  

@Gunnar Teltow  I'll be messaging you as I'm interested in hearing more about what you're doing in the St. Louis area, especially as an outside investor from Austin.  

@Vince Mayer  Good question on the drywall.  To be honest, I believe it's improper installation from a few years ago.  He attempted to drywall it in and painted the entire space white.  Will be on the list for further inspection.

@Vince Mayer @Scott Keating I will def look into both the ARV and rental rates more. I am going to work with a family friend / realtor in advance of my trip in Nov in order to have the CMA and rental analysis at hand to make a better call on the fix/flip vs. fix/hold strategy. Using Zillow Rents, there are only a couple 4 bed homes for rent and maybe a dozen or so 3 beds on the market. Prices ranging from $1100-$2000 with a wide mix in age, size, style, location as usual. I'll dig into this a bit more.

@Bill Gulley Thank you for the creative financing contribution! At the end of the day, following the repairs, I would be re-financing with a conventional loan so this strategy you're mentioning avoids the fees associated with the initial loan and keeps my money out of the downpayment? I was initially planning to put it under contract prior to the rehab work and the property will not qualify for a conventional loan until I invest $10-20K bringing to move in condition. Once I invest in the rehab and increase the ARV to market levels, I would look to refi to 75-80% LTV in order to pull back out the cash I put into the initial downpayment and the rehabs. Depending on the assumptions and value increase, this would allow me to have none of my original investment into the deal. Here are my thoughts through numbers:

Initial loan program:

• $140,000 - Purchase Price
• $28,000 - Downpayment - 80% LTV
• $10,000 - (rehabs - probably light)
• $200,000 - ARV after rehab
• $88,000 - Equity (invested $38K, gained $50K)

Second loan program:

• $200,000 - ARV
• $40,000 - Downpayment - 80% LTV
• $160,000 - Loan amount
• $48,000 - Remaining equity (check to me)

I'm looking further into ARV and rehab costs which will impact this equation but you get the jist of what I was going for. Make sense?