All Forum Posts by: Jobee Vincent Buenaventura

@Will Barnard
Yes, you and everyone's advice have been extremely supportive in helping me make the right decision and in making sure that I start off on the correct foot. I am grateful you all are taking your valuable time in helping the people of this forum, especially newer investors.

Moving forward, I plan to compile a list of questions to validate this joint venture and my protection in it when i finally sit down with the investor if everything checks out with the attorney. 

@Eric M. And after reading Eric's advice on offloading risk, I actually thought of an idea: I currently have a pre-approval with a hard money lender for a flip deal which was approved for way more than $60k. I am thinking of explaining my situation to the lender and will see if I can use their cash instead. One concern I think may arise is if I use the hard money lender, will it cut into my profit of the deal than if I just used liquid cash? Probably right? But will that outweigh my risk of using the my own money?

@Will Barnard

As per the contract (which is currently being reviewed by a hired real estate attorney), I will only be assisting in funding the completion of construction of the project and nothing more than the agreed amount. The house’s exterior is already done; drywall plumbing, and wiring is all set up. The house just needs paint, flooring, fixtures, and appliances left. I know this because the experienced investor walked me through the property personally. I am not required to cover holding costs, insurances, closings costs, etc., as it will be covered by the other party. Only the $60k to help complete construction is required from me.

The ARVs I mentioned earlier had verbally come from the investor. And we passed by those houses as well. They were less than a block away and were very nice properties. However, I have asked a realtor friend to gather me comps for this particular area anyway. Pending results at this time. 

@Brian Garrett

Thank you for that! That idea never even crossed my mind that the pool of potential buyers may be less since it is a more expensive home. I will take that into consideration.

@Greg Dickerson

Thanks for the quick reply!

He is asking $60k worth of funds to complete the all-in acquisition and construction of $600k. I'm not sure how the commission would be handled nor do I know the process in detail. I will be partnering with him using my LLC.

The $700k ARV is a conservative number. It can potentially hike up to $800k once home buying season starts. It is a 4bd 3.5ba property and slightly larger houses in the same street that are 5 or 6bd went for $900-$1mil this year in the area when he showed me the comps.

In my area, if homes are priced fairly, they’re usually sold within a month, since it is near NYC.

Hey all,

Long story short, after some extensive networking I finally found an experienced investor in my area of 15 years willing to partner with me, a new investor. He will walk me through the house-flipping process with a current deal that he's working on that's local to me. We will be seeing the property tomorrow (ARV ~$700k, all-in $600k) and he is promising a decent percentage of return if I fund part of the project. Afterwords once my prove my commitment, he will show me the ropes and will have access to partner up with his other projects.

We will be going over the paperwork tomorrow at his brokerage office and I want to know if there is anything I should watch out for. He has proven his portfolio to me but I just want to be careful. Would I need to call an attorney to take a look at the partnership contract to be safe?

Thanks for reading! Any advice would be extremely helpful.

@Greg Dickerson

Yes I've attended several local REI meets and have read some books already from BiggerPockets authors. I just feel like I'm stuck in the phase of getting my offer accepted. I feel like I can't really grow until I finally get a deal under my belt. If it's not right for me and too much risk for a newbie then I will find another deal with those suggestions.

@Will Barnard

If those margins are thin I think I will move on from this property and just stay patient about it. I was told that hard money was the best option for flips but if you guys recommended finding a private lender first then I will concentrate on that instead.

Thanks for all the advice!

hello everyone,

i'm just looking for advice on whether i should do a full gut rehab on a house flip as my first deal. the competition in my area is very hot as i'm usually beat out by all cash offers over the past few months so i feel like i have to look at properties that most investors would ignore. properties that may have higher risk...

the ARV of the property in question is about $370,000. rehab will cost me $110,000. land value is $156,600. it's actually already been fully gutted so i can literally see the skeleton of the house. there's not even anything to walk on at the second floor! Just beams of wood. I will be planning to use hard money 20% down at 11% interest rate. property is not livable so i believe a mortgage or FHA is not possible. so putting in the numbers on a random hard money deal calculator online, the return is about 12.5% or ~$40,000 which doesn't sound bad at all if the comps are right.

my real question is if it's worth the potential headache of doing a full gut rehab for an inexperienced flipper, as well as counting on the contractor to be doing work in the dead of winter in northern NJ. what are your experiences? what other risks should i watch out for?

Thanks for reading!

Thank you, Cameron, for the advice!

follow up question for everyone: would it be better to do the 3.5% down through the FHA and live with the PMI or should i do 10-20% to increase my equity for better refi?

Thanks!

Hey everyone! Real estate newbie here looking to score his first great deal. Learning a lot from the books and forums!

Here’s a quick backstory:

Saved just enough cash for 20% down for a $300k-$350k home in Northern NJ to move out of my parent’s. I thought instead to use the money to invest. Real estate sounds great after reading some books.

The Plan:

So, in the interest of fulfilling my criteria of moving out at the same time, I am planning to use a 203k FHA loan to rehab a distressed property once I find a great deal. Say if I get it under contract for $220k and then $ some for rehab; putting a percentage down and the rest financed from a lender. ARVs in the area go for $400k to $425k. Then after the seasoning period, I plan to cash-out refinance once it gets appraised. Afterwards, I plan to use this cash towards my next investment property, but will be using this as a primary residence.

All this will be done under my LLC. Does this sound good? What are the risks involved? And thanks for reading!