All Forum Posts by: Evan Hughes

Thanks to all for the replies.  They were very informative.  @Bob Green - will do.

I am ready to take the leap on my first flip here in Chicago.  Long story short, it seems that a hard money lender is my most accessible route to finance the purchase and rehab.  I have done some but not a ton of loan shopping yet, and I am trying to determine if making a lot of calls to different hard money lenders is a necessary process,  

I recently had a lengthy conversation with a representative of an HML that does quite a bit of lending in my area. The conversation was not about a particular property, but just about the process in general. The conversation was frank and informative, and it actually caused me to reassess my purchase price and general scope of work (don't bite off more than I can chew on the first one) and as a result it changed my criteria and farm area, which I am happy about.

This particular HML quoted 3 points and 13% on a 9 month loan plus a $1250.00 origination fee and 20% down. From what I recall in reading posts on this site as well as a number of flipping related books, I wasn't shocked by this, but it is still really expensive money. So my question is this: this par for a course for a HML lending to a first time flipper, or should I be doing a lot more shopping.

Any help/thoughts are appreciated.

Evan

@Brian Eastman

Ah yes, I did see that rule against lending to an entity in which you have a 50% interest.  I should have realized that it meant that I can't use  the funds to buy my own flips.  Thanks for the response that was exactly what  I was looking for.

I was curious as to the mechanics of using a SDIRA for fix and flips. I read through this string, and my question may have been answered in the string, but I just couldn't find it. Anyway, can an investor use funds from a SDIRA solely for the purpose of making the investor's 20%-30% contribution toward the flip with additional purchase/renovation funds coming from a lender? The IRA principal and a reasonable amount (5%?) of interest would be returned to the SDIRA upon sale of the flip.  I would fully expect that any profit from the flip in excess of the payoff to the IRA and lender would be taxed. Is this type of scenario allowed? If so, would the interest payable to the IRA be tax deferred?

I've been lurking on the site for several months, and I am getting ready to jump in with my first fix and flip as an investor.  I did one years ago as a homeowner, but that was a different animal because time was not of the essence. 

My question has to do with the best way to deal with the hassle of building permits. My target area is mid-range (for Chicago) homes on the far north and northwest sides of Chicago. There is virtually nothing that you can do to profitably flip a SFH in this area that does not require a permit. In almost every case you will be finishing basements (possibly digging them out), moving or removing walls, moving staircases, adding shed dormers to 1 1/2 story homes, updating mechanicals, etc.

Is anyone willing to share the name of an architect or architects, who's practice is directed toward the investor rehabber with respect to the permitting process in Chicago, i.e. they can do the drawings and get the permits approved as quickly as can be expected in this town.

If providing such referrals violates the forum rules, I apologize and ask that you ignore my request, but I would appreciate any other insight from experienced rehabbers