All Forum Posts by: Joshua Buchanan

Ned,

Thank you very much for the response. I'm assuming I'd need to factor in costs to pay attorney as well?

Ryan,

Thanks! I used Talon Mortgage. I just used them again and purchased house for 79k and escrowed in closing costs and another 43k with no cash out of pocket as a draw each time needed for repairs, however I think some things have changed recently where you have to show the cash or put it down then get it back.

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $35,000
Cash invested: $8,000

Bought on a 15 year loan at 35k
Financed entire purchase price. Put new windows in, paint and light fixtures, minor plumbing. 8k invested total. Getting 750 rent and property now has value of 74k.

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

I am very intrigued with owning as many cash flowing assets as possible

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

I found this deal through a Facebook add from a motivated seller. He was having medical problems and wanted to sell and relocate to a house with one level. I offered 25k but ended up settling at 35k.

How did you finance this deal?

15 year commercial loan 5 year fixed with 5.65 interest. Commercial loans in my area arent doing 30 year fixed

How did you add value to the deal?

Put all new windows in, refinished hardwood floors, all new light fixtures, painted exterior and interior.

What was the outcome?

Put about 8k into it. Appraised for 74k after.

Lessons learned? Challenges?

I have learned quite a bit from this property so far with just how to deal with tenants and having best strategy there

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

Yes I always work with my wife Brooklyn Buchanan who is a fantastic realtor in Evansville, In.

Hey all! I am in the process of trying to pick up a property that is a probate situation. Buyer really wants to sell to me but doesn't know how. Here's the situation. 

Owner of house has his name and wife's name on it. Both passed away in same week and now daughter wants to sell to me but there was no will in place I believe. The other daughter was talking to an attorney and said it could be a process and there was talk that Medicaid could want the asset as well. Daughter hasn't heard from attorney in a couple months now and doesn't know how to sell it to me. 

Is there something that me or daughter can possibly do in this situation for me to purchase this house?

I hope you guys can help! Thanks

I keep hearing about the BRRRR strategy, but i dont know how effective it is with cash flow. Couldnt this strategy kill your cash flow?

Say you refinance and increase your loan amount to pull cash out. Once youve increased your loan youve also increased your monthly mortgage payments, but yet you have NOT increased rents. Wouldnt this kill ypur cashflow?? How do you do the BRRRR strategy without hurting cashflow? I never hear people talk about the negative on this...

So say i owe 100k on house but its worth 140k. If i cash out refinance and basically have new loan of 140k that would increase my mortgage correct?

@dallas trufyn

Can you explain numbers more on that? I see how to use 70 percent rule and deduct repairs but how do i focus on the profit margin im wanting in the end after holding costs. Can someone show all math on analysing deal for flip?

im stressing out about this deal and because I've never used a hard money lender. what would my monthly holding costs look like. I estimated about 1k monthly for holding costs

@jakeadams

Please everyone, especially people experienced, what do you guys think about this hard money lending and deal??

It's my first one and I'm stressing out about losing. 

Purchase Price55,000

Value100,000

Loan Amount64,500SNAPSHOT

ARLTV64.50%

Renovation Budget15,000Sales Price100,000

Time to flip (months)9

Interest11.00%Purchase Price55,000

Points3.00%Renovation15,000

Mortgage Tax1.00%Interest & Origination Points7,256

Transfer Tax1.00%Property Tax & Maintenance750

Mansion Tax0.00%Taxes and Other Costs11,595

Title Insurance1.00%89,601

Broker Fee4.00%

Property Tax and Maintenance1%Flip Economics

Total Profit on Flip10,399

Acquisition CostsBorrower Cash in Deal At Purchase12,280

Purchase Price55,000Borrower Cash in Deal (9 months)18,351

Legal Fees1,500Borrower ROI on Cash in Deal (9 months)57%

Mortgage Recording Tax645

Filing Fees250

Appraisal400

PL Legal Fee1,500

Title Insurance550

Origination Points1,935

61,780

Interim Expenses

Renovation15,000

Interest5,321

Property Tax & Maintenance750

21,071

Sale Costs (Paid from Proceeds of Sale)

Broker Fee4,000

Transfer Tax1,000

Mansion Tax0

Legal1,500

Filing Fees250

6,750

Sale Price100,000

Costs89,601

Borrower Profit/Loss 10,399

Hey everyone on bigger pockets, i was hoping to get some input on a flip deal. Theres a house in really great neighborhood selling as it. Looks like just tlc stuff. They are selling for 69900. Arv is prob 100k. Its a forclosure. I think banks usually want 85 percent if im correct. It was just listed today and already an offer on it but seller has 48 hours to accept so im going to view it in the morning. Im not sure on repairs yet but my guess is its probably not more than 10-15k. I was think on offering $59,559. I would need to get hard money to be competitive and close quickly. What do you think about this deal?

thanks for input!