Hello Everyone,
My name is Fernando Reyes. I am fairly new to BP and this is my first time posting in any threads. From other discussions I've read, it appears that everyone is really here to help each other out so I'm taking a leap of faith.
I've been studying up on REI for about a year now and this month I finally decided to actually start getting my feet wet. I've sent out mailers, started attending REIA meetups, called homeowners, and this weekend I actually started visiting houses I'd like to invest in. So here's my "so-called" dilema.
Of the properties I went out to see this weekend, one of them seems like an awesome deal. If my analysis is correct, I would expect to make around $40-50K on what would be my 1st deal. The part I'm having trouble with is funding and how the deal is structured. So, I only have about $10k in liquid assets right now. I am willing to get a Heloc to take out equity in my home if I need to as well but that will probably only get me another $10-15K.
The deal is with a wholesale company that wants me to put down $2,500 of non-refundable earnest money (if they accept my offer). I don't have an issue with the down payment but they want me to close within seven days of them accepting the offer. This is where I am struggling. All of the hard money lenders I've been looking up appear to take at least 2 weeks to close and since this will be my first deal, I expect that they will take longer to approve the funding (if they go through with it at all). It seems risky. If I can't close on time I stand to lose out on the $2,500 but if it goes through I could make a potential profit of $40-50K, maybe more. That's close to what I make in a year at my regular 9-5. I just don't like not having much control over the deal. So here are the numbers. Any advice would be appreciated.
Asking Price: $270,000 (non-negotiable)
Estimated Rehab: $ 35,000
ARV: $400,000
Expected Profit: $ 50,000 (after paying lender back and agent commission)
