All Forum Posts by: Jim Zatko

I live in Michigan just north of the state line from Toledo, OH. I just flipped and am currently renting out a house in Toledo. And I'm looking for another house to flip. I found one here in Michigan on the MLS in a little town called Summerfield. There isn't a lot of investor completion in this town. Anyway... This house has been on the market for about 10 days or so. I walk through and make an offer yesterday. AS SOON as my realtor contacts the agent to submit an offer, my realtor calls me back and says, "there are 2 other offers that just came in, you need to submit your best and highest offer". Why didn't the agent tell my realtor when she called to see the house? It just seems to me like these realtors, just say things like that to try to make a fake bidding war. It's kind of laughable. I re-cruunched the numbers and offered $2,000 higher. It's still a really good deal. I was just curious if you guys run into "phantom bidders" or houses that have been on the marked for weeks, and all of the sudden have multiple offers when you make an offer?

There is a really good book titled "The Culture of Fear". It talks about how in America, people are unrealistically fearful. The book talked about how the media thrives off of pumping viewers with negative news. So this does not surprise me at all. Everything you read, listen, or watch is negative and makes you feel like you are going to die, lose all your money, get robbed, ect. On a side note. There is also so much fear involved in Real Estate investing. Anytime I talk to people about renting or flipping, they tell me a horror story about their brother's, neighbor's cousin that lost it all and I should stay away. Anyway, enough of my rant! Thank for sharing. And I do a lot of work in Toledo and I feel really safe... Except for a few neighborhoods on the east side. :) 💀🔫🔪

Your repair budget seems way too low... Roof, carpet, bathroom updates... I'm thinking more like 20k.

Thanks everyone, it's great to hear about other situations. Yes, Ryan it is in WLS. I've tried to get it removed from a flood plain but FEMA has not established a Base Flood Elevation for my area. Just to be fair I have about $75K into it at this point. I purchased appliances, and Paid a hefty tax bill. I'm going to hang tight for another week or so, and if it doesn't sell I'm going to rent out and keep it forever. LOL My realtor said there were 4 houses in my area that were comparable to mine in price but not as nice as mine. And they all sold, Mine is the only 3 bed 2 bath home for under 95K that isn't a train wreck, in my area.

On A side note, don't feel too bad for me, when I was 24 years old I sold my first house I built and profited 60K. The current house I live in I built in 2013, i spent about $220K into it and it is appraised for $310K. So I'm in a decent situation. 

I just have a lot to learn about the Toledo market, and about house flipping.

Thanks Jake, this is good advise. I might keep this house forever! Its a nice house in a nice area, good school district.  I may do a land contract, i just have to see if I can get a mortgage on it if I take out a land contract. But land contracts are in HIGH demand for my area. People have horrible credit and good income... go figure.   

Originally posted by @Jake Harris:

 Hey Jim,

First of all congrats on more than getting your feet wet and just jumping in with both feet. So I have been in your shoes before and got greedy and countered or played hardball with people and in time learned well that was stupid I could have made money and then now I was losing money. So now I have a saying or mantra that I heard somewhere that I often repeat. 

"You never go broke taking a profit"

11k profit on 70k is actually pretty good if you look at it. That would be a 15% return on your money in a short period of time. Obviously you have a bit more wisdom now and I am sure you would not make the same mistake. As far as your current situation I would say get a mortgage. As it will take the gun to your head mentality out of the equation and if comps are still around 100k then still work on selling it. The Spring and summer are the best times to sell. Also when you factor in that rates are priming to increase maybe this summer it will spurn some additional home buying activity. 

You may have already done this but shop around for insurance rates. 100/mn seems pretty high for a house worth 100k I pay around 50/mn for houses work 200k+ but I guess it depends on your flood zone and I know next to nothing about Toledo. And if all else fails rent it out. 

Cheers and Good Luck,

Jake

But I will defiantly try to flip again after this one!

So I decided to take the plunge last fall and purchase my 1st flip. I paid $50K and comps were selling for 100k. This house needed some work. After purchasing it for all cash on Auction.com, I realized it was in a FLOOD ZONE! I didn't do my homework and check the flood maps prior. (Live and learn). Flood insurance will cost the buyer $100 per month.  So I sunk $20K into it. Carpet, Paint, all new kitchen, new furnace and some other odds and ends. I listed it for $99K in Jan. 1st. I offered to pay 2 years flood insurance... Got a ton of showings. I got one offer that I countered, and they walked away. ( I wish I would of taken it now! I would of profited $11K) Another live and learn experience.  So I lowered it to $94K,  The showings have dried up the past couple of weeks. So... I just had a meeting with my realtor, and he suggest I leave it on for another week or so. I wanted to take it down and rent it out, because i'm literally bleeding money every month in taxes, insurance, ext. He said the Market is hot in toledo now and all the comps have sold in my neighborhood.  But he thinks it will rent for $1,100 per month. He also told me I could do a land contact, Lease with an option to buy, Lease purchase, ect... Honestly I'm considering just renting it out. If I could get 1,000 per month and get a mortgage on it I would still cash flow even with the flood insurance.  So to all you newbies, out there, don't be afraid to jump in. Just check for flood insurance, and don't be afraid to take a lower profit than you initially thought. I think most new investors like me get greedy and try to kill the fatted calf with their first flip, and miss out on a decent profit.

Jim from Toledo.

What is the best website to advertise rental properties in Toledo OH? Craigslist?

I have been in contact with Jerry. I might give him a call when I hit the 6 month mark. I'm a few weeks away. He does 75% LTV which is pretty standard.