All Forum Posts by: Johnny Young

I am looking for anyone that has partnered with Tom Cafarella and Ocean City Development. I did a search on the forums about them and only pulled up a couple of threads, with no real info. Their pitch sounds good, but I am always a little skeptical of someone selling their "system" to generate amazing deals no one else has. Any info would be greatly appreciated!!

You are very welcome! That is what I love about BP. Glad I could help! 

IMO even though there are some "rules of thumb" they are going to grossly inaccurate in estimating repairs. As an investor, or during my days working for a builder, we did eyes on the property with measurements and scope of work lists. Because every house is different there really aren't any metrics to use on every house. Once you have done the estimating, a lot, you get a feel for costs and can guess at a ballpark figure, but doing that or using a coverall per square foot number is no replacement for actually developing a scope of work and cost estimate including labor and materials. Just my two cents.

Luka, you are right as well. From my experience in the building trades and remodeling, I have the repair costs down pat and know the unknowns are there waiting inside the walls, I have seen it. That was what made this house work for me is the knowing what it needs. Line by line, square foot by square foot I can tell you the exact costs of materials and how long it will take me to do it. It works out to about 43,934. The issue is time and making the holding costs payments. With me working a full time job and working full time on the house, I don't have time to work side jobs to cover my rear end make double sure I make those payments. That's where I think I'm too close to the limit. Thank you all so much for the invaluable input!

Thanks Austin, I do really know the numbers, and my timeline. Where the problem for me lies is the excess for contingencies. If I go this route everything I have access to is maxed for the duration of the project. In my rehab estimates I have a 15% contingency built in and that should cover anything construction wise. It's the fact that all the payments on the money during the flip push our budgets right to the limit. It's doable but if the house goes one day over my estimate, or a paycheck comes short we will sink. Fast. During the flip we will be adding 1400-1700 a month to our current bills which is all our extra cash in our budget. If I had a good contractor already doing 85% of the work I could work some extra jobs to give us that extra cushion. However at this moment I'll be doing the 85% myself. Doesn't leave room to wiggle. I think it's just too close to the line for me. Especially for my first flip.

Matt, you are absolutely correct. I have been studying and diligently saving and getting prepared that I am chomping at the bit to get started. Of all the different ways to invest in real estate rehab is my favorite because I know how it all goes together, and love it. You are right I'm jumping the gun. I'm going to take the advice hold back and wait for the money to build more on my end. I guess I was so excited I finally found a deal that works I was ready to do whatever had to be done to get my foot in the door. I would really like to wholesale it, however I don't have a buyers list yet. I'm working on the networking to get to know more people, but just don't have a list of people ready to jump on a deal yet.

Thanks so much. I have grown up in and around real estate my whole life. I know houses inside and out and have worked for more than 20 years in construction. I know in my heart that it's a good flip deal, provided the purchase price is accepted, but my gut tells me I'm flying too close to sun by leveraging leveraged money. Thanks again for the input. I think partnering up with an experienced investor would be the best bet.

From what I have learned from here on BP and talking with others, no you don't need an agent involved. You do however still need a real estate attorney or closing company to handle the paper work and close the deal. You and the homeowner work out the terms on purchase agreement and submit the papers to the closing company. At least that is what I understand for here in Tennessee. Call and talk to a title/closing company or a real estate attorney to see what specific things you need to get it done. Good luck!

So I have been studying the strategy of rehabbing for almost a year and half while we built credit scores and retired debt to increase our debt to income. I've been actively looking for houses and running analysis on them to try and find one that the numbers work. Few and far between in and around Nashville, at least for a beginner. Then, all of a sudden there it is. A house where the numbers work. A SFH 3 beds 2 baths, unfinished basement with two car garage on an acre and a half. The house is being sold from probate and it's in terrible shape. They are asking 10900, an offer of 90k was my goal. About 40-50k in repairs for an ARV of 200,000. So I see the house take my measurements and do a take off and talk to hard money lenders and find one that bites. The trouble I am having to make the decision is we aren't quite all the way there with the down payment. I have access to enough money to get there... but it will be leveraged. Borrowing money to borrow money on the hopes I can get a house and get it flipped with as few as possible issues makes me very nervous. To cover the payments until we sell will push our budgets to the max. Since I am doing 85% of the repairs myself to make the numbers work I won't have time to work an extra job to cover payments. I feel like it's a good deal but I also feel I should wait until we have more cash to work with. What do you guys think? Risk it with all the borrowed money and high payments and costs to borrow or wait till we have more cash on hand to lessen the struggle to make payments and risk only losing cash and not cash and credit?

Welcome to BP! I am a new to REI and am hopefully going make my first purchase in the next week or so. I haven't been here on BP for very long but everyone here is super friendly and helpful. Good luck!