All Forum Posts by: Marcus Johnson

My biggest question is "Do you have anything in writing from the original agreement". Everything needs to be in writing even if it's family. Family sometimes can be the worst when it comes to money.

It also sounds like the Gov't program called Harp 1 and 2 where those home owners that were underwater on their homes and had difficulty paying their mortgage the rates would be altered thereby lowering the monthly payments. So yes in a way it does still mean that someone is cashed strapped.

I'm in a slightly different position, but yet not really. Let me explain. I currently don't hold any real estate investements, but I started my own handyman business 4 months ago on the side of my normal full time job in pursuit of capital for the purpose of investing in real estate. So yes I do have the same problems that I juggle daily.

-My wife and I have agreed that we both get 3 days a week to pursue things of interest such as the football team I play on and my business. So there are 3 days a week where I'm able to work 5 to 6 hours on my business without complaints. The other 4 days are family related.

-I find myself at working thinking more about my side business aspirations and writing on forums.

-Hearing negative comments from broke people on how you cannot get ahead and that you must come from wealthy family to get a head.

-To hear from friends that I'm cheap and should spend money on cars, bigger houses, etc... The problem is that I'm to wise for that and we put over 15% of our income into financial investments such as 401k's, Roth's and Mutual funds.

*What helps me get through all of this is my wife, she is very understanding and frugal which helps in us pursuing our goals to become financially independent and wealthy making our money work for us.

Thanks for sharing your real life experiences. Hope it goes well.

So what type of downpayment % are they requiring? Also, are you cash flowing the rehab, holding costs and selling costs? I'm just asking because I'm in the process of saving cash for my first flip and I have a number in mind as to what I need, but I'm hearing a lot of people telling me on this forum that banks won't lend money for the purpose of flipping.

How did you finance this investment property or are you paying cash for everything?

Nope I haven't thought about a home equity loan. So if not a conventional loan, then what type of loan do people get when they flip homes?

The reason I'm inquiring is because I'm practicing doing calculations within my area of interest and the foreclosures in the area are selling between 60k - 90k and the comps for ARV fall between 160k -180k. I've lived in this city for 8 years and I've worked around it for the past 20 years so I know the market well. I've also done my own rehabs in the area so have a familiarity with the costs. So for an example I found a 70k home that I if I put down 20% that would be 14k for the DP. Also with the fixed costs such as purchase costs, holding costs and selling costs I'm figuring another 15k based on the area. As far as the rehab costs could range anywhere from 15k to 25k depending on what's needed. (roof, flooring, furnace, ac, windows, etc...) So basically at sale time I would have around 100k to 110k into this place and the ARV's based on comps would be around 160k to 190k I'd stand to make 50k to 80k before taxes.

So my first question is I realize that I expect to pay for the inspection fee, closing fees and lender fees upfront in cash and the holding costs I'm planning on paying for out of pocket with my monthly paycheck, but I'm wondering "Do I plan that with the sale of the property that the proceeds will be used to settle the selling costs so I don't need to setup aside capital for that purpose?"

The reason I ask is I'm trying to figure out how much capital I will need to purchase my first flip home. Currently I'm estimating $32,400 to $42,400 based on the issues the house presents. My wife and I do have secure fulltime jobs with good income and have no debt except our mortgage which is very low so we do have disposable income which would allow us to pay for the mortgage, taxes and insurance and other carrying costs. What do you think of my plan so far? I haven't quite saved the lower of the two amounts yet but am strategizing.

My friend who is a professional painter always tells me that eggshell is the new semigloss.