All Forum Posts by: Kyle Clark

I've yet to invest but I may have some insight based on what I've learned here and what I've gathered from books and YouTube. One thing I will suggest is reading the book, "The Flipping Blueprint". It's very concise and goes into a ton of detail about your second question (even the part about Zillow's Zestimates). I've also just started reading "The Book on Flipping Houses" which is a bit longer and more extensive but seems great thus far and I would highly suggest it, it's also part of the BiggerPockets bookstore.

I'm in Columbus, OH and I'm sure all of the other people from Columbus will come out of the woodwork on this one since Central Ohio is extremely hot right now. Inventory here is insanely low and any house that is reasonably priced will go fast. I've heard similar things about Cinci and Cleveland but can't speak for Vermillion or Sandusky. With that being said, if you're seeing that recently sold houses (within the past 6 months) sat on the market for 6 months or more before being sold, it's likely your house would do the same. It's also possible that those houses were not updated and people are looking for no-hassle, move-in ready homes, so I'd make sure to look very closely at houses with the same features that you're anticipating for your rehabs since, like you said, there may be more or less of an appetite for nicely rehabbed homes in Vermillion than for a run down "fixer upper". You could always call up a realtor in the area and tell them you're interested in investing in the area and would like some insight into the market.

From what I've heard and read, do not rely on Zestimate numbers at all. Sometimes they're spot on and sometimes they're tens of thousands off. What I've read/heard is that you should take anything that isn't a hard piece of data with a giant grain of salt. If a wholesaler tells you an ARV, don't trust it, go find comps in the area that can give you cold hard facts to gauge from. If Zillow tells you a Zestimate, don't trust it, go find comps in the area that give you cold hard facts to gauge from. Basically, if a person or system tells you something and it's questionable where they got their numbers, don't trust it, go look up comps. Ideally, you'll want to look for houses on the same block, or very near, with very similar features such as beds, baths, square footage, whether it was rehabbed and how extensive, lot size, garage, etc... The ideal comp will also have sold within the past 30 days but if that's not available, look at the most recent beyond that. Hope this helps. I know ARV is your most important number since it determines your MAO, so getting it right is crucial. I've also heard the holding costs for a flip can be a killer if you're using hard money, so knowing how long your house will be on the market is insanely important.

Interesting. Both of us are Kyle C. and both of us are looking at getting into real estate investing with $50k lol. I'm also originally from California as well, so that's pretty weird.

Anyway, I'm new to this whole thing too and am still in the capital building phase so my opinion doesn't count for as much as everyone else here but I agree, Ohio is blowing up. Basically anywhere in the Midwest is going to be a fraction of the price of most of what you'll find out west so it might be a good idea to at least do the research and consider it.

I'm in the same position as you in that I have a full-time job so I'd have to make it a bit more passive but the amount of resources out in Ohio (as you can see by the number of responses from people here in Columbus) would make it very possible. The only downside is that the competition seems pretty crazy at the moment, so you'd have to network a ton to get decent deals, but obviously not impossible by any means. One option I'm considering, while harder with a full-time job but still doable, is flipping a few properties to build a bit more capital in the short term and using the profits to put toward a multi-family (maybe BRRRR). Anything leftover, or the equity that you pull out of the BRRRR, could then be thrown at a few more flips, and you rinse and repeat. This would obviously require a good team, particularly a good GC, but 100% within the realm of possibilities in the Midwest with $50k. I'd love for someone to correct me if I'm wrong since this is the process that I'm seriously considering, but might be something worth taking a look at.

@Marc Rice I appreciate the feedback. That's the hope is to approach HMLs with this since I'd likely be looking at shorter term loans. Do HMLs tend to require on-site inspections similar to traditional loans? I'm still trying to understand the nuances between the different types of funding.

Hi,

I've been following BiggerPockets posts and listening to podcasts about real estate for a couple months now. While I'm building capital and trying to get my architecture licensure sorted out, I've been in the resource gathering and learning phase of my real estate journey. I'd like to get some feedback and possibly open up a discussion for new investors on how to initially analyze a deal and format a PDF that I'd send to lenders. I've used the free version of the 'House Flipping Evaluator' tool and built from it to compile my PDF, based off of a template I found from theirs and other websites. 

I was curious if this looks like something a lender would take seriously or if there's any information that is pertinent for them to provide funding. I'm also curious if, at first glance, my numbers look correct. I know everyone here is insanely busy but I figured if there's a place to ask for feedback, it's here. This is based on a deal that I was actually looking at with a serious mindset. Based on the numbers, I would not have moved forward with this deal, especially since I work full-time and would need a GC to manage the project, adding additional cost. But I figure that's the beauty of this tool, it provides me with a critical mindset to be able to quickly say "Go" or "No-Go" to a real world example. Interestingly, the status of this house is now pending which was not the case when I started building out this tool, so I'm curious to see if my ARV and purchase price are near correct in the next few months but I wanted to get anyone else's take on it to see where I can improve. Best to practice before the real thing.

Thanks in advance for any feedback!

(The images are just there to provide a summary)

Deal Analysis - 2590 Sullivant Ave. Columbus, OH 43204

I don't have any rentals and I'm not an investor yet, but from a construction/architecture standpoint there are a few things I would pay attention to.

I can't speak to your experience but I feel like some are fairly obvious, like dark spots on the walls which could signify molding which could be costly depending on the severity.  There are things like cracking along the base of a foundation wall or if it is slab on grade, look for deep cracking in basement concrete which could mean differential settlement of a property which equals foundational issues. Obvious spotting on ceilings which could mean leaky pipes from upper levels. Water damage/must/mold in basement which could mean poor grading/drainage of the site. Excessive soft spots in flooring which could mean damaged subfloors, whether from water or other damage. Obvious sagging of roof elements or awnings could mean damaged joists or rotting sheathing. Ask about leaks from the roof since roof repairs can be costly if you hire out. 

Take lots of pictures if they'll allow it so you can refer back to them later or get another opinion if you have friends in construction. I'll go take measurements of a site and take mental notes and think I have a good gauge of a property but still find myself referring back to site pictures and written notes half a dozen times when doing as built drawings because there's a ton to remember. I don't know how the process goes for renters but if you're planning on doing renovations in the near future, it might be a good idea to bring a tape measurer and get some rough dimensions to get rough pricing of cabinets and things.

There are other things I would personally look for but those are some of the surface level things that may get you started. I'm not sure if anyone who has more experience in the rental industry has a different opinion but I'd like to hear that as well.

I've been in Columbus for almost 7 years now so I'm very familiar with the area but unfortunately I haven't started doing any investing in the area yet. I've started to do some searching and networking recently though, so hopefully I can be a resource within the next year or two.

@Alia Ali I cant speak to the market since I'm not an REI yet but I can say there has been a population explosion since I moved here which I can only imagine is good for the real estate market. Also, I've been here 8 years and have loved it more than anywhere else I've ever lived and plan on staying long into the future, so kudos for picking a good city.

@Collin Boyer That's the stuff I need to be learning. I was assuming that with my own funds I could go in as a cash buyer but you can do that with hard money lenders as well, correct? What kinds of rates do you generally see from them? I'd hate to cut into profits if I don't need to but I've been thinking lately about the tax I'd pay on selling my stocks (even though they'll be long term gains), it's still in the ballpark of 10%, so you're probably right. I'll still likely wait to build up that stock portfolio for some security and get my architects license but definitely something to keep in mind. I might contact you about it in the somewhat near future.

@Collin Boyer I'm in the same boat. I've not bought a property yet but I'm saving capital to buy in cash. I could liquidate my stocks and buy now but I feel like that's idiotic.

So my goal for 2021 is to, hopefully, let my other investments appreciate enough that by 2022 I'll be able to liquidate a portion and buy 1 or 2 properties. I'm also working toward my license in architecture, and I'm almost there, but I need to knock out the tests, which could take me a better part of 2021.

With my previous construction and heavy equipment experience, and the experience I'm currently gaining as an architect, I think I'd be well setup to tackle a flip or 2. With that being said, I hope to use 2021 to learn more about the dos and don'ts of real estate investing. That's if I dont spend all my time studying for the ARE lol.