All Forum Posts by: Keith White

the $1900 total expense each month is including my insurance also I forgot to put that in there as to how I came up with that number

I recently have been in discussions with a friend of mine about purchasing 4 condo units from him, two 3 bed and two 2 bed. I have been involved in the property management field for a few years now but currently do not own any rentals of my own, me and my business partner currently concentrate our efforts on flips. These units are in a decent location but the apartments themselves don't have the best of tenants on average. I managed these units for him in the past and he always had issues with tenants paying when I was involved. I know that doesn't sound good but I do know other owners in their that do not have any of these issues so I'm chalking a lot up to the fact that the screening wasn't tight enough (I was not involved in this). He no longer lives in the area anis ready to dump the units, I explained we have two flips going on now so I did not want to spend money upfront. Here is where I currently stand with our offer:

Purchase price would total 200k for all (4) units with a payment plan as such

$850 a month interest only payments for the first two years with a balloon payment of 15,000 at the end of year one and year two.

Bringing the total down to 170k then doing a standard 30 year mortgage at around 4% financed by him the seller for payments of around $825 a month. 

The reason I'm interested in this setup is because it allows me time to set aside money from the flips to pay what basically is the downpayment. These units currently sell for 55-60 and 45-50 respectively.

Hola fees total $530 a month for all 4

taxes roughly $320 a month for all 4

Totaling roughly $1,900 a month for all 4

3 bedroom units rent for 850 and 2 bedroom 700 for a total of $3,100 a month if all goes well.

We are just beginning to negotiate terms this is where we are starting please let me know what you think or any other info you need. Thank you

@Ivan Oberon 

This is the exact idea I had just to use someone else's POF then set a settlement date for a few days after I close on my other property, my only concern was since the bank is only entertaining cash only offers and my POF would be coming from someone else wouldn't that be considered a personal loan and not cash offer? Or I'm I over thinking it.

@Rob Beland

I do have a few options of people I could probably lend from my issue being how does that come into factor when trying to present an all cash offer when in reality I'm getting a short term personal loan? Would I just have them transfer the funds to me then present the offer, or would I present the offer with the proof of funds coming from them? 

To begin bare with me if my questions or ideas don't really make sense as I'm still very green in the investment world. I have partnered in a few flips before and have done one flip on my own so far.

 I currently have a house that we have accepted an offer, gone through inspections and apprasials everything is good to go and settlement is set for Aug. 3rd, I also have another property that has gone through the inspection process no appraisal since its a cash offer but no settlement date set yet. 

My question is until the one house closes on the 3rd my funds are tapped, I want to make an offer on a bank owned property but I know it is going to have to be a cash offer. I will be receiving roughly 100k cash back on the 3rd and this property I'm looking at I would need around 35-40k range in order to secure. What options do I have here as I can't show a proof of funds as it is not in my account yet and the house that is closing is not in my name but my partners. I could prob find a private lender to loan me the money for the 3 weeks until we close on the other property but since the funds haven't been in my account for 30 days would that still be considered a cash offer on my part?

Thank you for your help and any suggestions or questions are welcomed 

Thank you Jonathan, I really am excited to get to know others on this site and grow from their knowledge. As I said I have had success but really lack a lot of knowledge when it comes to the financial aspect of it, and I know I need to learn so that I can expand and grow I can't always just use cash from our bank account to finance everything or it will be a one house at a time process. 

First to begin with just wanted to give a quick backstory about myself. I am a beginner flipper in Md and have only done houses in the first time home buyer price range for my area ( $130k-$160k). Due to the fact I have never approached a bank or looked into other means of funding (which will be a whole different topic i need to post about and get info) I have financed my flips with cash. So in doing this I am limited with the amount of money I can work with at a time. 

All of that being said I recently have been looking into a near by market that is filled with older Victorian homes that are in rough shape and in a prodomently rental filled area with few home owners. The area is desired because of the school district but the homes have been let go. I'm thinking about making a move on a couple of properties that are side by side, one is a corner lot the other has a empty field next to it. So If I could get both properties and renovated them they will be a little more isolated from the nearby homes. The ones I'm looking at I could get for around 30k a piece with needing roughly 25k a piece in renovation cost to get to where I would want them.  Looking at comps I do think they could bring in 80-90 once renovated. I am just not used to this price range as it is well below what I'm used to so the type of market I'm going for I'm unsure of.

My question is since this is an area that is prob 70-80% rentals if I were to renovate these homes most likely I'm going to have to try and make the, appeal to rental investors. Rent in the area goes for $800-$1000 a month. Would I be better off trying to flip them and then do the typical staging and hope either an investor or first time home buyer with a low budget offers on the house, or would I be better of to renovate then fill the homes with renters and then list the house for investors only with tenants all ready filling the homes with positive cash flow? Also if I were to do that I am not familiar with the rules as far as selling a house with tenants as I am new to this. Thank you for your time, Keith

ha, called us the outhouse of md or something like that. Well either way there is a lot of money to be made in this area and not many people competing over it. Hopefully I will learn from this website and meet like minded people. Fingers crosses.

haha I guess us eastern shore of MD aren't so welcomed here haha

Well to begin with my name is Keith I am 32 from Salisbury, Md located on the eastern shore. I am interested in all types of various real estate investments but flipping houses is my real passion and hopefully future full time job. Lets see where to begin, well I have been in the construction field for the past 12 years and have picked up many traits along the way. I recently the last few years wanted to get into flipping houses, so I partnered up with a child hood friend who had the same interest as me and was a hvac installer for 15 years. Between us we had friends in all trades and lines of work. We started from nothing no money at all from either of us and did side jobs and other projects over the past few years. We were lucky enough to be able to get our hands dirty on a flip property that another friend of ours was doing about 2 years ago, and from that point we have now done 3 flips while investing with someone else and are currently in the process of closing on our first flip of our own. My wife acquired her real estate liscense this past year as to help us have an in into the market and to obviously save us money on the front and back end of a purchase. I think we have progressed better then I would of imagined and we are ready to try and take it to the next level, and I'm hoping I can learn things from a lot more experienced people then I to guide us on our way. Our biggest downfall is our lack of knowledge about the financial lending options and other things such as tax deferral and such. As to this date we have never used a lender or even spoke with one just worked all with cash that we generated separate from our daily 9-5. Well sorry for the long intro just wanted to try and give my backstory the best I could.