All Forum Posts by: Whitney Hutten

Always make a GREAT first impression.  My vote... show it when it's complete.  Even it's work the buyer will never have to do, many can't see past the dirt, dust, etc.

@Lawrence Snipe In theory, yes.  The home will have to appraise.  If you are using conventional financing their will be capex items they will want to see in repair (roof, foundation, HVAC, etc) before they will lend.

@Daniel Later There are other deals.  Dealing with meth issues should be on the "deal killer" list.  Your liability is too great.  

My question is more around, is this home in a good market for rentals? If we assume yes....If the home value is $65-75K, needs $5K of rehab, and rents for $1000, potentially in 6 months you could refinance out 75% of the home value. If that ARV is $100K you have nearly all of your money out.

@Account Closed I'm not a CPA (so consult yours), but if you have a single-member LLC, the LLC will be considered disregarded anyways and everything will fall on your personal Schedule C (for the business), or Schedule E (for the real estate). I can tell you from experience, having multiple LLCs can get expensive very fast depending on the state. And Marcus is correct, you are probably signing on a loan where you are still personally liable for the debt so the LLC isn't much help. Think about these things first...(again consult your professionals!):

1. Good liaiblity policy on the property (don't skimp)

2. Good umbrella policy that covers each property and entities

3. When you have sizeable assets, an LLC (or series-LLC) that limits the assets a tenant can get at

After that you can get super complicated with LLC and trust structures...

Most of all, the best asset protection strategy is to just be a great landlord and take care of things before they become an issue.

Ouch!  That has to be discouraging...

1. Here is the link to look up for FEMA food maps in the futre https://msc.fema.gov/portal/search.  I would add this to your due diligence checklist in the future... it's a must!

2. Flood maps are updated, so lines can change in the future.

3. You can contest the map, if you have good data (I have to do this with one of my properties if I want to sell... the lined moved on me :( ).

4. Is there another use for the land that you could use to exit and go find a better deal?  For example, cattle grazing, farming, developer next door that needs a flood plain to drain their development too.

@Nick Talvy Have you looked at the days on market of other homes in the area that are close to the highway?  This could be an additional data point on top of what Jonathan suggested.  If the DOM are low even being backed up to the highway, then maybe.  I would ensure that if you do get this deal, you have multiple exit strategies (retail flip, rental, lease-option, turnkey, etc)...

@Anthony Broadus  Second that to posting here on BP, Facebook, and networking at local events.  Also... if the deal is that good... and you can find others, think about just landing 1 investor first.  If that one investor is looking to pick up multiple deals, and you serve them well, not only can you build with them, they will recommend you to other investors...  Just thoughts.  

J Scott has a great book on estimating rehab costs.  You can also take a look at different project costs on a site like Homewyse.  It will give a high/low for the area... though you should always do your own scope of work with your desired finishes.  The more scopes you do... the better you will get at it when you even see the pics.

@Matt Brunson Another market to consider as a wholesaler in te $60-70K range is flipping to a turnkey provider that could rehab, tenant, and place with a PM. If the ARV and rents are very close to 1% and above the landlord will love it, and if there is spread the turnkey provider will love it too. Just a thought.... I don't intentially flip to other investors... but I'll do it if it make sense!