All Forum Posts by: Landon Dolezal

Just going to add some keywords in case some people who are more familiar with my area might be able to give more input, but I appreciate all advice! :) -Washington -Seattle -King County -rehab 

Alright so im on the brink of pulling the trigger for what might be my first and second rehab deals. However i want to get some feedback from the BP community. I had initially gave up on any private funding. (No family or friends with cash reserve for anything). So Im planning on using HML. However i was also just recently asked if i had wanted to rent a house with a couple of friends, i had pitched to them the idea of a 203k loan (instead of renting) and do a live in-flip. They seemed cautious (typical) told them it would not happen unless the deal was prime. ( I would be giving them a share in the profit) Wouldn't want to risk my credit and my cash reserve i have going for me at the moment, But i figured two roommates would be really reliable for Holding costs. So heres what i have planned:

(Insert rehab deal) pull a (streamline)203k loan, occupy for 90days with 3.5% down Xdollar house. with two roomates. 

• i know it will depend on deal of house. Im currently looking at a house whose asking price is 200k, rehab costs est 20k So with the flip formula and desired profit of 20k. Im looking to send in offer for 100k. I will have to consult agent for ARV because the comps that i see on Zillow are from 2012. I believe its because the area is a highly desired area. A lot of great houses. However its Zestimate is 235k Also the house says its been listed for 110 days. Definitely have to do some due diligence to make sure there no huge issues.
• Not sure if i will need a contractor on title because im buying it as a owner occupied so if i wait after 90 days does that mean its not considered a flip? ( Dont have contractors license just yet. )

Next for my own personal investment i wanted to use a Hard Money Lender. ( I have another house that's in the same premises, somewhat similar deal.) I know ill probably speak to HML about the specifics but:

• would i just ask for a few more thousand more give or take a bit to cover holding costs? After the 3.5% from the first deal ill still have a 2k left for investing cash. but i want to make sure i have enough to rehab and hold. This one i was planning to offer contractor 50% profit since i will probably need him on title. ( I do actually know the contractor personally.) He's very successful and skilled, iv shadowed him on a couple occasions. 

So please if i left out any details ask, i want to make sure my business plan is thorough, if anyone asks about my exit plan, i guess id probably take a hit on the profit and try and least break even (Pay HML first priority). I will rent out if worst comes to worst, i am prepared for that. but im looking for high profit so that i can do rentals a bit easier. This post is more pertaining to the legality and financial standpoint than the deal itself. This is just assuming good deals (which is almost never that easy.) I do have an old coworker who has rehabbed quite a few houses, and said he might be able to advise me and there. Thanks for the feedback and look forward to the criticism. :)

I know a lot of investors especially beginner ones try to use Hard Money Lenders, becuase they base it on the deal more than the person itself. However they do have higher rates. Private Money (if you can get it) is the most ideal.

I have been delving into the keywords of BP trying to find out the details behind the required GC license in WA. So in case there's any future questions i thought id place this link here that gives you a breakdown of all the costs to start. 

http://blog.suretysolutionsllc.com/suretynews/how-much-does-a-washington-contractors-license-cost

As a newbie im not sure how it helps provide leads for a business. Most people i know use a mls or just an agent to find their houses. It looks really modern and sharp and obviously its been working for Danny but im just curious about the science behind it?

I dont have any landlord experience but that sounds like a very scary idea. You will have residents  taking advantage and using more power/water. From what i hear 100-150 is the normal cashflow for rentals around here. You will end up with negative cashflow if you try and support this. 

No I get that part, when it needs ridiculous help but house that are just outdated but are still in decent condition, there's a lot mor ecmpetition I'm assuming because it's more live able, if you know what I mean. So I guess my question is do you only go after the houses that no one else will buy cuz it's off the deep end?

Thank you so much @jscott  I'm almost ready to pull the trigger on rehabbing and I'm reading your book religiously land learning a lot haha. 

From most of the posts ive seen, i see flippers discuss how the numbers make it a good deal? However im curious as to what they deem flipper worthy in a cosmetic way. Like an abandoned house with mold and doors is an obvious choice, but where is the line drawn between destroyed and updated enough that competition will buy house regardless of its appearance?

For a rehab, Sorry