All Forum Posts by: GC Vaghasia

Any updates regarding your insurance policy? Curious to find out what you ended up doing. 

I haven't been able to attend the last few meet-ups. Look forward to seeing everyone at this one!

@Justin Eaton - Thanks so much for coordinating another meetup! It's one heck of a drive for me, but I'll be there! Look forward to seeing everyone.

@Nik S. Thanks for your feedback!! That is the exact game plan. Looking forward to the journey!

Thanks for the warm welcome BPers! Indeed, BP is very addicting. It's an amazing resource that allows us to share real estate knowledge with one another. Truly priceless!  

My family and I own several two-family houses in Jersey City and an 8 apartment + 2 commercial complexes in Northern Jersey. I was ALWAYS under the impression that significant amounts of capital was required to purchase real estate. It wasn't until I listened to the podcasts and read @Brandon Turner 's books, that I realized otherwise.

So, I decided to move forward and take action! I close on my first property tomorrow. It's located in Gloucester County, NJ. It was an REO that I picked up for about $60,000. It has two bedrooms and one bathroom. The ARV on this property is approximately $160,000. I will need to put in about $50,000 to fix up the place. Hoping to walk away with about $30,000 after expenses and fees.

The second property that I hope to close on is located in Salem County. It was also an REO that will cost me about $50,000. It needs only $25-30k of renovations and the ARV is about $130K. However, I'm going to price both properties to sell. I don't want to get stuck holding the properties for longer than I need to. Another option that I'm currently debating is whether to rent them out. I could probably rent them for about $1,250. However, I need to study the market and decide at a later time. I will surely use the BP calculators to help me weigh my options.

In any case, it's very exciting to say the least! I need to find some reliable contractors in South Jersey who can rehab the properties for me.  Please let me know if anyone has contractor referrals for South Jersey.

Thanks! ~GC

Hey Paul, I don't like the idea of selling the two current investment properties and rolling that money into an HML type of venture. Yes, it may seem more lucrative when looking in from the outside, but there are many hurdles that HMLs have to go through from my understanding. I'm no expert, but I think it's better to stick to what you're best at. You have been slowly growing your portfolio of properties and I would continue down that path. However, if you really want to get into flipping, did you consider purchasing REO or properties that require rehab? Even though you may have limited capital to get started, you can utilize a HML to get you going. Just my two cents for what it's worth! Good luck! - GC

I have realized that no two hard money lenders are alike. They all have their pros and cons. For a new and inexperienced flipper, you are probably looking at 3-4% points which are usually payable at the closing. In addition, you will be charged approximately 11-14% interest per year. Some have prepayment penalties and some do not. Some require you to at least utilize the funds for 6 months and others don't care. As @Prashant P. stated, most lenders will loan 60-80% of the ARV. It all depends on your experience and the HML. Most of the time, they will loan 100% of the renovation costs. However, these funds will be distributed through draws. You will need to provide a clear draw schedule to the HML. You will be required to pay for materials and labor out of pocket and then submit a draw request to the HML. The HML will send an inspector to your property to verify the renovations according to the draw schedule. If all looks good, they will send you payment within 24-48 hours. This will usually cost you approximately $150 per draw since someone will come out to verify the work that was conducted. If you are planning to do the work yourself, most HMLs will require that you have your home repair contractor license. Just some food for thought...Good luck!

Any luck with finding the REO bank contacts? Where are you currently flipping? I work with some wholesalers in South Jersey but would like to find reliable wholesalers in North Jersey.

@Maybelle Francisco - I looked at several properties in Fair Lawn, but the numbers haven't been making any sense. I'm also looking in Teaneck, Bergenfield and Garfield. Please keep us posted on your findings and experience. Good luck!

@Steve Boianelli - contact @Cynthia Hairston who can help you with securing a HML.