All Forum Posts by: Kevin C.

This is what I would do if I were in your shoes! 1) Change my degree to finance/real estate. 2) Get a credit card (to start building credit) and use it for small things and have the balance automatically paid off each month. 3) Get a job as a loan officer, leasing agent, property manager, handy man, etc. to save more money and have W2 income. 4) As soon as you can qualify for a loan, find a house near your college campus and use your $25k savings to buy it as your primary residence, then flip it while you live there or rent it. 5) After you graduate, use your additional savings you were able to come up with to buy another house to flip/rent. 6) From there decide if you want to keep working a job and invest in real estate on the side or use all your savings you were able to accumulate in college (because everything is paid for!) and go full time RE investor!

I did a house that had this kind of cheap wood paneling, painted yellow. Some parts had turned wavy because of moisture I think? The walls were in really bad shape in my case but if your walls are in better shape just painting could be ok! I ended up removing all of it and put up drywall in some rooms and painted the original shiplap in others. A few things I learned: the paneling actually comes down pretty easy. It was held up by hundreds of small trim nails, not glue. Try to bring it down in as large chunks as you can. I'm my case, behind the cheap wood panels were two layers of very old wallpaper. I did drywall over the wallpaper, no problem. However, there was some damage to the ceilings in the demo so I had to do some additional drywall I wasn't expecting. I had to redo all window, door, and baseboard trim because drywall was thicker than the wood paneling. It won't look right unless the trim is all taken down, then put back up after the drywall goes in. Also take down the trim BEFORE trying to take down wood paneling. It will come down much easier, and you need to take the trim down anyway. Good luck!

@Jervin Justin, so your keyless deadbolt has no exterior plate or a plate with no keyhole? So to be up to code it can only be locked from the interior by hand?

I love the idea of using retirement accounts for real estate. Keep contributing to the 401k while you have the match to take advantage of free money but pull out what's in there via 401k loan or early withdrawal. Because you're correct, returns on a good real estate deal can vastly outperform the stock market in the long run. Even better if you happen to have a Roth 401k or Roth IRA that you cash out early you would only pay penalties and taxes on the earnings, not your contributions so the IRS would take a much smaller chunk of those withdrawals.

Thanks everyone! I checked with a hard money lender (LendingOne) and they said the same thing. They won't do rental loans with foundation issues. They would, however, do a short term flip loan which could then be refinanced after 6 months to a 30 year. 

We mentioned to the seller that the foundation issues were going to cause financing issues and they agreed to fix the foundation before the lender orders the appraisal. 

Do you think I would have better luck with a hard money lender for a deal like this? Or would they have similar requirements in regards to the foundation? 

Pretty much every old house that would make for a profitable deal in the area has foundation issues because of the soil here. I need to be able to submit offers knowing appraisers/foundation won't stop the deal every time. 

@Jeff Wallenius, can you share what kind of ratios you have experienced with submitting offers?

What percentage of your offers get accepted?

What percentage of those accepted offers do you have to back out of via inspection contingency?

Also, how are you able to get an inspector out so fast? (two days)

Appreciate the insight. 

The home is definitely livable, just a little uneven in some places. Is there a rule of thumb on generally acceptable foundation shifting? Or does any evidence of shifting at all usually disqualify?

Doesn't a refinance in 6-12 months cut significantly into ROI since you pay lender fees for the first loan and then again on the refinance? Or do refinance loans have much lower fees typically?

I've always wondered to the BRRR strategy can turn a worthwhile profit.

I'm looking at buying my first buy and hold investment property listed for $130,000 with an ARV of about $150,000. The house needs some foundation (pier and beam) work, among other things, which I am willing to repair after purchasing.

My lender explained they won't fund loans on houses that need foundation repair, but it's possible their appraiser wouldn't mention it since most of the homes in the area are older, pier and beam, with a tendency to shift around. 

Is this common for loans to be turned down because of this? Has anyone run into a scenario like this where foundation issues prevented funding?

I'd hate to drop $300 inspection and $400 appraisal fee just to have the lender turn down the loan after the appraisal.