All Forum Posts by: Kevin C.

REX (Real Estate eXchange) will be discussing this very interesting topic later today at the BP Energy Center starting 6:30 PM. Network with successful local investors and join us. Seats are for free.

Totally agree with Kevin. Flipping is gambling. Don't gamble with money you can't afford to lose. Owner occupy a quad, looking to live for free or make $$$ while living in it. Pay yourself rent for a year, save up and repeat.

Commercial loans are based on the performance of the subject property. Many times you don't have to have s job to get a commercial as long as you have 20% down and the property meets the banks minimum requirements. As an example, In AK, those general commercial loan requirements are: Cap rate of 8% or higher DSCR of 1.25 or higher Two years Schedule C tax returns of property. Inspection with all health and life safety either repaired or escrowed for repairs to be completed within 6 months. 20% down with seasoned funds (in your account for over 90 days). Credit score of 620-640 or above. Obviously there are other minor underwriting guidelines depending on the funder, but commercial loans can be great. Shop around.

Tiles are a maintenance headache. Grout is required to be sealed yearly if you follow the directions. Improperly sealed grout allows water to get behind the wall where it can't evaporate and can lead to mold. Unless it's a high end rental, replace with a nice three piece surround. They clean up nice, look great and install easy.

Here are some seller note or "escrow collection" forms that you should review to line out terms. They're provided free by a local bank that services most seller notes in AK where this is common. https://www.fnbalaska.com/application/files/8414/2490/7709/collectioninstructions.pdf Here is their main Escrow page. https://www.fnbalaska.com/business-solutions/escrow-services

Split the bill 50/50 between the tenants. If the units are different size, adjust proportionately. This is common in AK where we require lots of heat and achieves your goal without spending a dime.

I have been flipping houses for about 20 years. I also own multiple rental properties. I would highly encourage you to pursue rental properties prior to getting into flipping. Flipping properties is inherently more risky and can often times be closely compared to gambling. The more you gamble the better you get at it but it still speculative. Inevitably every flipper has one project that fails. Hopefully that happens much later during your career than sooner but realistically that's unlikely. In fact, the most risky endeavors are typically your first. When you eventually have a property that goes south, how do you intend to repay those losses? If you do not have a steady stream of income coming from hold properties then those funds can only be reimbursed through your job or the liquidation of valuable assets. Hold properties that produce passive income can offset unforeseen expenses, holding costs and losses as opposed to you having to work harder at a job or selling your retirement assets in order to compensate. With a great credit score and $20,000 down, have you run the numbers on investment properties in your area that could provide passive income first? If you already have established rental properties and are now looking to get into flipping then I agree with the statement above. Find someone who has done it successfully for many years. Second, identify some properties that have been rehabilitated in your area and see what has gone into them. Familiarize yourself with the attributes that are selling and unnecessary upgrades. Talk to several realtors and find the sweet spot in your market. Those are typically homes in the affordable price index which are roughly 80% a median household income for your area. Those properties have the lowest days on market, highest list of the sales price and typically require the least amount of expensive upgrades. Stay away from higher end homes until you have vast experience. They typically have longer days on market and require a lot more money to rehab.

Learn how to protect you and your real estate assets through incorporating at the November 21st Anchorage REX Meeting. Discover the mistakes that "Pierce the corporate veil" and risk making your corporation useless.

Patrick Callahan with Davis Wright Tremaine LLP will be our guest. Patrick is an Anchorage attorney who specializes in helping real estate investors create wise business structures with Corporations for liability and tax protection, Self Directed IRAs. Even for your rehab/flip properties!

From licensing, account handling, insurance considerations, state filing and more; knowing how to do it right the first time is critical to your success.

This is sure to be a great meeting! RSVP here:  https://www.meetup.com/R_E_X_/events/232057650/

For more information call 907-865-6529

You may have to apply for a short plat permit with your local municipality. First check with your City office and title companies on local ordinance and laws. 

Often times, once your re-plat is drawn up with the proposed new lot lines, your muni may require that the plat is approved by any utility company with an easement that is effected by your new plat. Since the size of the lots will change, you'll also need to make sure that set backs, resitrictions are not impacted by your adjustment. Finally it may need approval from your local platting board. 

Your local laws are going to determine the hoops you must jump through. 

Go to your local bank and ask them for a Escorw Account Form from their Business department. These forms have all the information that you need to stabling a seller note. Interest rate, term, late payment fees, foreclosure notice date, prepayment of fees etc. Here is a link to a great form that you can use to consider the terms in detail from an Alaskan Bank that handles most of the Seller FInance deals  in Alaska. 

 Escrow Form FNBA