All Forum Posts by: Joshua Nudell

@Garrett Gable,

So, was this a wholetail deal?  Did you actually come up with a $35,000 purchase price and close on the property?  Or did you turn around an do an assignment contract or double closing to sell it another individual?

Either way, it sounds like a great first deal, and congratulations.  I would just like to know more about the structure of your deal and financing (if any) of the deal.

Thanks and best of luck!

The owner is an older woman who has been landlording from afar (PA), and is now moving down south and wants to stop landlording.  She wants to move as soon as possible, and needs the cash to pay some back taxes ($20k+) and buy a house down south.   That's the story I got from the wholesaler.

No work is really needed, maybe painting inside.  The Section 8 unit just got a new lease, so that means that it passed its annual inspection?

Good afternoon everyone,

I received an e-mail from a wholesaler in NJ who has a property under contract in East Orange, NJ 07018.  Here are the details:

Duplex multifamily property 2/1 downstairs, 3/1 upstairs.

Currently rented for $1050 down and $1350 up for a total of $2400

Taxes are $8,300

Tenants pay their own utilities (separate meters).

Upstairs is a Section 8 tenant who just got their lease renewed on 7/1.  Their contribution is $116 per month, and they pay their part every month on time.

Updates were done in 2013 including new roof, new kitchens and new laminate flooring.

The wholesaler is asking $107,500.  Tax assessed value is $168,200.  Similar properties are listed at $150,000+.

I was thinking of ordering a quick BPO to get a better idea from a local agent, but I feel it would easily sell for $140,000.

It looks like I would have two good strategies with this one; 1) Purchase all cash, then sell it normally for a small profit, or 2) purchase, and refinance and keep renting it out for rental income.

Anyone have some suggestions or thoughts?

I don't have the full cash purchase price on hand, so I'm also wondering if this would make a good partnership opportunity.

Thanks all!

@Jordan Williams,

I hate that show, and yet I stop to watch it when it's on.  The numbers are fairly bogus because as @Jay Hinrichs mentions, they don't take into account the vast amount of expenses that a flipper has to deal with (holding costs, fees, closing costs, etc).

If you were to look at your example from the boiler plate flip analysis: Purchase price = 70% of ARV - Repairs. You would have an ARV of 400 * 70% = 280 - 40 = 240. They should not have paid more than $240K for the house. But it's a TV show. Additionally, they have a LOT of experience, so they can reduce their holding costs. They are licensed realtors, so they can reduce the amount of fees. They are on a TV show, is that really what they pay for repairs?

I always thought that there were several things going on there; the contractors were not charging normal rates because they're getting free advertising, are they really concerned about making the right flips on that show, or just doing a flip because they get compensation from the show? Somehow they have all those episodes, so they must be running multiple jobs at the same time, they definitely have funding above their "life savings".

In a nutshell, don't jump into flipping because the show makes it look easy.  Jump into flipping because you did a ton of research, you've put together a team of reliable and responsible people to get the job done, and you have a solid plan how you're going to go about flipping your deals.

@Christian Sgrignoli,

I would say pass on this "deal".  You have WAAAY too many red flags on this:

1.  You are inexperienced.

2.  This deal seems to be very complicated (lots of variables and unknowns.)

3.  The seller may be motivated, but you shouldn't be pressured into buying your first deal until you're ready, and having a July deadline to pull the trigger puts too much pressure on you.

4.  It sounds like a D class neighborhood.  As a first time investor, I think you should target more stable neighborhoods until you have the experience/cash reserves to handle the inevitable contingencies of dealing with a D class neighborhood.

5.  @Barbara G. rightly points out that the expenses involved are not clearly defined, and the income doesn't seem to justify looking further into it if you're already at almost 50% of the income from your debt service alone ($900/mo payment to the seller).

6.  The rewards are too meager for a D class neighborhood.  Those types of neighborhoods typically have a higher visible cash flow because of all the additional expenses they incur (vacancy, property damage, legal fees, etc)

I would suggest you do more research on this particular type of strategy.  It's usually used for college areas, where you're renting to college students while they attend school.  Try to find someone that rents rooms for low income tenants, and get their advice on how to proceed, and what type of numbers they would look for when approaching a purchase for a new property.

On the positive side, it's good that you're trying to think creatively about putting a deal together.  Definitely continue to look for creative ways to do things, and then feel out your ideas here on BP to see what others with experience and/or knowledge have to say.

Good luck in your endeavors!

@Juan Martinez,

Do you have equity in other properties? If so, you could quickly get a HELOC or Business LOC for the amount needed and then get permanent financing after closing. I closed on a LOC against my rental in Northeast PA in 2 weeks.

Additionally, you can probably secure financing more quickly through small local banks who are not selling the loans out the FHA/Freddie/etc. Or possibly though local credit unions, who may offer you more favorable terms.

@Eddie T.,

It's a personal line of credit, so it's in your personal name.  They do also have business lines of credit, but I don't know what the requirements would be.

I applied over the phone, the whole process took about 30 minutes while they performed a credit check and I provided my annual salary information and other details.  I was approved contingent upon my becoming a member, which I did the following day at one of their branches on Long Island.  I only told them it was to pay off a higher interest rate loan, but once you have a line of credit, you can use it for whatever purposes you want.

Hi all,

I know that people are always looking for ways to add funding options for their deals.  I just thought that I would throw a possibility out there for whoever may be interested.

Bethpage Federal Credit Union offers an UNSECURED line of credit for personal use.  It's a rather narrow set of criteria for qualifying (good+ credit score, good W2 income, low debt to income) but could be a good additional source of funds.

I applied for a LOC and got a 13.95% rate on a $25K line. I believe that they go up to $50K on their LOCs, and I have a somewhat high rate because my credit isn't as good as it could be. The requirements to join the credit union are live, work or do business in Nassau County, Long Island, NY.

If you have any questions, let me know.

@Mark Brogan,

I'm sure that I'm not the only one waiting for you to post the follow up to your question.  How did you handle it, and what were the results?  (4 days is long enough to keep people in suspense I think.)

@Account Closed,

Welcome to BP.  You can do several things, but first I would recommend listening to BP Podcast #39 with Seth Williams (www.biggerpockets.com/show39).  That podcast is only about flipping land.

After you listen to that podcast, you should have a lot of starting points for your research.  Take notes while you're listening of things to do (select some counties near you to contact regarding finding the land you want to flip, etc) after you finish the podcast.

Then you can use the site as a resource to:

• Search the forums for land flipping related posts ("flip land", "land flipping", "buy and sell land", etc)
• Search the marketplace to look for deals that are for land and perform trial analysis to see if you understand the concepts you've learned
• Add the people who are talking about flipping land as colleagues and start discussions with them on how they got started, and what they would recommend you do and don't do as well as mistakes to avoid
• Post more specific questions on the forum once you have a more solid understanding of what's involved and where you specifically need a clearer understanding of what you are trying to do.

Best of luck in your educational research!