All Forum Posts by: Jake Denning

Investment Info:

Single-family residence fix & flip investment in Pearland.

Purchase price: $130,000
Cash invested: $46,500
Sale price: $232,000

We just finished our first Fix N Flip project and overall, I would say it went well.
ended up having about 36k of our own money in the deal between closing costs, having to bring our own money to the table, (3k overage on our rehab budget) put us all in at 46,500. We just sold it 10/31/19 for 2k over asking at $232,000 with $5500 in seller contributions. We also pulled it off in exactly 90 days which was great as well. This left us with roughly $56,000 to us. After you subtract our own money in the deal we made right between $19,000 and $20,000. This was split between myself and a partner.

What made you interested in investing in this type of deal?

I was ready to jump on my first real investment property!

How did you find this deal and how did you negotiate it?

We purchased this deal from a wholesaler in my area. We did not do a whole lot of negotiating as perhaps we should have. The competion is quite high so when the opportunity came we jumped.

How did you finance this deal?

We purchased this deal with Hard-money.

How did you add value to the deal?

We did a total cosmetic rehab on this property, as well as the typical landscaping/cleanup.

What was the outcome?

Overall the outcome was great! We made a bit of money but we learned SO MUCH more through this one transaction.

Lessons learned? Challenges?

We had budget issues and trying to stay on course. We should have payed more attention to comps but the lack of comps also saved us in this particular flip. Our contractor stayed on track and mostly on budget with the exception of 3k.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

I partnered with my Agent on the deal as I am not currently a RE agent. This was one of the best things about this deal, I for sure could not have done this without her! We also used professional photography, staging, and an interior designer to help keep us on track on this first one. It cost us a bit more but in the long run I think it saved our butts!

Investment Info:

Single-family residence fix & flip investment in Pearland.

Purchase price: $130,000
Cash invested: $46,500
Sale price: $232,000

We just finished our first Fix N Flip project and overall, I would say it went well.

We purchased this property using Hard Money and ended up having about 36k of our own money in the deal between closing costs, having to bring our own money to the table, (3k overage on our rehab budget) put us all in at 46,500. We just sold it 10/31/19 for 2k over asking at $232,000 with $5500 in seller contributions. We also pulled it off in exactly 90 days which was great as well. This left us with roughly $56,000 to us. After you subtract our own money in the deal we made right between $19,000 and $20,000. This was split between myself and a partner. I could not be happier with the first out come and definetly we learned alot on this flip!

What made you interested in investing in this type of deal?

I was ready to jump on my first real investment property!

How did you find this deal and how did you negotiate it?

We purchased this deal from a wholesaler in my area. We did not do a whole lot of negotiating as perhaps we should have. The competion is quite high so when the opportunity came we jumped.

How did you finance this deal?

We purchased this deal with Hard-money.

How did you add value to the deal?

We did a total cosmetic rehab on this property, as well as the typical landscaping/cleanup.

What was the outcome?

Overall the outcome was great! We made a bit of money but we learned SO MUCH more through this one transaction.

Lessons learned? Challenges?

We had budget issues and trying to stay on course. We should have payed more attention to comps but the lack of comps also saved us in this particular flip. Our contractor stayed on track and mostly on budget with the exception of 3k.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

I partnered with my Agent on the deal as I am not currently a RE agent. This was one of the best things about this deal, I for sure could not have done this without her! We also used professional photography, staging, and an interior designer to help keep us on track on this first one. It cost us a bit more but in the long run I think it saved our butts!

@Nicole Draper Best of luck! the others bring up some valid points too. People are in a very distressed point in their life and something has drastically disrupted their life a death but when you look at the leads investors chase they are all at some radical points in peoples lives (Pre-foreclosure, foreclosure, divorce, probate) People are going through a pretty disrupting time, and some don't like it when you contact them but thats the nature of it, so we help who we can and best of luck to who we can't! Many people who inherit properties are not set up to hold them and they can quickly fall behind, keeping up with properties, dealing with MLS is a total diff procedure than cash or hard money. The 3 properties I have closed on have all been probates and I can tell you they were all more than grateful for us taking over something they wanted nothing to do with. There is a different process with probate as you have legal work to deal with but depending on your state will be how stringent that is, for the transfer of real property. Also, if they have a will and are probating that etc... In Texas if they don't have a will we can just do an affidavit of heirship as long as it was the decedent's homestead, get the notary and recording done and we are good to go. If I can ever help in anyway feel free to reach out!

 I agree here, I also have a family that has invested in me but my first deals were traditional and hard money, once you start having success money starts to show up in some weird way as you post and talk about your success. Sounds like you should jump on the Hard money or traditional band wagon first then take that track record to them! 

Hey Nicole, I've been dabbling in some probate stuff down here in Texas but I am pretty brand new to it all, so I will refrain from giving unwanted advice. If you have not already, go check out Sharon Vornholt, she is on the site and podcasts as well as posts her own content she is the Probate Queen!

Regards,

Hey Ryan, glad to see you are starting out and are a hell of a lot further along than most at 19. I ran into similar issues when I was 20 but I had been building credit since I was 18 or so and was able to smoothly make my first purchase after I had turned 21 (22 now). When you are getting a traditional loan credit is a huge factor in your financial credit-worthiness. I ultimately started with a credit card which I fronted $2,500 dollars for a $2,500 dollar limit, I also added a new credit card to the mix every 6-8 months until I had 3 in total and as the others said, I cleared that balance out every month and never spent more than 15% of the overall limit, on average a good rule of thumb is not to use more than 30%, for the credit bureaus purposes but anything less is even better! After 2 and half years of doing that I was able to jack my credit score above 750 and have a total credit limit in excess of 5k. That allowed me in Texas to buy a quarter-million-dollar property granted I only had 20k in my pocket and I used the USDA no money down loan. For-sure if you are going to get traditional financing you need to build credit since they all decided that is a huge factor, but as we saw in 07-08 they threw that rule out the window and that didn't blow over so well for the US lol. Traditional financing is not the only method for financing a property like you mentioned you can get creative and go to a financial partner, and secure funding that way, that, of course, is going to be your quickest route but don't be surprised if you get turned down by quite a few people before you get a yes granted you don't have a whole lot to bring to the table other than your sweat and equity which is not to be discounted! Be sure to map the deal out from A-Z projected profits, expenses the whole 9 yards and have a full financial break down for any money partner. Since my first Traditional purchase (august 2018), I bought a property in August of this year with Hard money and just closed on another last week with Private money but I could not have secured my PML without presenting my numbers and showing that I have the witts to make the transaction move smoothly and be profitable for everyone. Make sure you know your #'s and lingo as well as understand them!!

Hi Cade!

I am not in your market area but might be able to shed some light and at least give you my experience. I am now 22 years old and I purchased my first "investment" property last year when I was 21. I had roughly 25k in the bank that I had managed to save up for a few years. When I took a look at everything I was needing a place to live and wanted the investment. I ended up buying a 4b/2b on a USDA no money down loan with less than 10k out of pocket. I had already "pre-sold" each of the other 3 rooms for $600/m giving me a check for $1800/m and my mortgage is right at $1600. After utilities and all that, I am about at a wash but I still live for free while my bank account stock piles higher. The other added advantage of doing a low/ no money down loan is it keeps your CASH in your pocket "cash is king", I will leverage money for the rest of my life. With the cash I was able to keep in my pocket I was able to fix up the property some and "add" value.

Since that time I was able to save up more money and purchase my first fix and flip at the beginning of August last month which was exactly 1 year after my first purchase and we will be listing it tomorrow.

I do not know your market, but if a good deal is tough to find, I would just have an agent scower or set keyword searches for any kind of "Distressed" listings and then when you find it just house hack it but certainly keep in mind that any sort of traditional financing, for the most part, will require that the property be in what's deemed "livable condition"

Hope this helps and if I can ever be of any assistance or advice feel free to reach out to me!

Awesome BRRRR story! Great work Kyle!

Home Equity Line Of Credit

Hey Adam, there are lots of investors that got started with no money down loans. I did a USDA loan on my first property and house hacked and have been here for the last year, the biggest thing is that I rented out 3 of the 4 rooms which pays my mortgage and puts a little cash in my pocket each month, could be advantageous for you for sure!

Best,

Jake