All Forum Posts by: Jesse Rodriguez

@Jon K. You’re totally right, these are things I didn’t do prior to purchasing. Now I understand the concept of you make money when you buy. I can’t do sweat equity, I don’t live in the same state and work full time. I listed with an agent who also runs the PM company, she sent me compa 240-250k. Not sure about this lender either, but I won’t use them again.

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@Nathan M kiefer Yup, that’s where I’m at. I’m trying to see which will lose me less money.

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@Bill J Fay Im definitely on board with you and will not use them anymore. I feel like I got scammed but also my fault for failing on the due diligence . The agent I’m using is an real estar investor agent. She is on BP and owns a PM company that renovates which is where I got my bids from.

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Quote from @Jacob Sherman:

have you had an as is and arv appraisal done ? Do you have a scope of work for the remaining work to be done ?

The ARV was done by the lender and it was 310-325k but my agent send me the comps which showed 240-250k. The property is now listed as 239k. I have the scope of work which totals around 80k, possibly more because I just found there is a water leak in the main line 😢

I was wondering if I can fix the other units (total work ~20k-25k) and sell with the last unit still distressed.

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Quote from @JD Martin:

Quote from @Jesse Rodriguez:

@Jon K. Thanls for the response. Your right about the lost price. I bought at 225k off a wholesaler, I thought the arv would be 310-325k but it's more like 240-250k. My rehab budget is 50k but after getting bids, it'll more like 88k. Market rent would total $2500. I'd likely be negative cash flow as well. So now I'm trying to sell without putting any work just so I can pay off that HML.

No good way to answer without more information, but what I gather here is that:
1. You bought for $225 and ARV is $250. That's a killer right there. But you were killed even in your original numbers. If you thought ARV would be $325 and your rehab budget was $50k you shouldn't have paid more than about $190k for it (about 70%). You always need cushion for cost overruns, closing costs, time delays, and all the host(s) of things that can go wrong with a flip. Even if your original numbers were right you were going to be working for free - 325-225-50=50k-holding costs-closing costs-taxes = about Zero.
2. Total ARV rent for 3 units is $2500? Must be small units, that's $833 per unit. What are local market rents for similar sized units in your area?
3. I'd be a little suspicious of the HML because most want you to succeed - there's no glory in taking back a unit unless they've grossly underloaned on the value. Unless the HML is Joe's Uncle, who knows nothing about RE, they are generally not going to lend you something that's guaranteed to fail which is the case using your original numbers.

If you're not on the personal hook for any deficiency, or don't have any assets, you may have to just chalk this one up to bankruptcy and learn from the mistakes. If all of your numbers are right you're unlikely to find someone who's going to take this off your hands without you bringing a check to closing.
2.

Thank you for the insightful response, I think you’re 100% right. You pretty much laid out the exact situation, so I’m wondering if I should fix and hold or sell for a loss. The problem is that it’s listed for 239k and I don’t think it will sell. So I’m going to lose money either way, so I’m trying to figure out how to lose less.

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@Nicholas L. No, I have not.

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@Nathan M kiefer I hope that’s not the case! I have a reasons why I want to sell anyways.

1. It won’t cash flow, I underestimated the rent.
2. I anticipate future problems with the property, there’s foundational and electrical problems with it. I underestimated the rehab and already over budget without even starting work.

3. I’ll end up paying money no matter what.

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Quote from @Nathan M kiefer:

Double down and fix it nice to sell but don't over improve.

selling a headache will only give you a bigger headache that you'll need a aspirin the size of a hockey puck to overcome.

There are no shortcuts when you get into this situation that end well for you so put the work in and maybe you will make a buck?

My concern is because it’s a triplex, I’m limited to sell to another investor. I thought about improving a little but my hard money lender guy said don’t even bother putting any money into it.

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All Forum Posts by: Jesse Rodriguez

Jesse Rodriguez has started 19 posts and replied 140 times.

Post: Flip/BRRRR going south, seeking help

Post: Flip/BRRRR going south, seeking help

Post: Flip/BRRRR going south, seeking help

Post: Flip/BRRRR going south, seeking help

Post: Flip/BRRRR going south, seeking help

Post: Flip/BRRRR going south, seeking help

Post: Flip/BRRRR going south, seeking help

Post: Flip/BRRRR going south, seeking help

Post: Flip/BRRRR going south, seeking help

Post: Flip/BRRRR going south, seeking help