All Forum Posts by: Liz Spina

Thanks @Rich O'Neill !

@Rich O'Neill Yes, we would be all in for about $210k and I estimate that $250k would be the minimum ARV. Do you have any recommendations for contractors that work with construction loans?

As for the custom cabinets, my husband that is building them, so the overall cost is not too high, but when you factor in his time, it definitely feels like too much.  We are building this custom pantry into a wall that used to be wasted space and I don't think we'd be able to purchase anything like it.  Definitely not the wisest design choice on our part in hindsight, especially if we end up selling, but I think we are too far into it now.  We bought this house as DIYers with plans to live here forever, but after a lot of education on investing, we are really starting to look at this house in a different light.  

@Brian Ellis Thank you!  I appreciate that advice.  We are living very frugally.  We are aggressively paying down student loans, but I am starting to reconsider saving the extra money every month to invest into this business instead, at least for a little while.  I am weighing the opportunity cost there.  We are willing to make the sacrifice, I just have to figure out the smartest approach.  That is why we started looking inward at our own house and realized how much time and money it is costing us!

Help! I think our personal residence may be holding us back. We are on the hunt for our first brrrr property and we will be using private money loans for the down payment. We are hoping to acquire upwards of 20 properties in the next 5 years. Based out of Philadelphia suburbs (Delaware county specifically).

We bought our personal house in 2016 with the plan to either do a live-in flip, or a fixer upper that we live in long term.

The house was purchased for $154k, well below market value (comps in our neighborhood sell for minimum $250k).

We have done almost all of the work ourselves thus far including:

New kitchen and opening of floor plan on first floor (not completed- still needs trim and some custom cabinetry)

New deck and sliding doors

Rework of 2nd floor to add bigger closets, 2nd floor laundry and new larger bathroom (bathroom not completed)

Total cost of renovations so far: $25k

The reason we only paid $154 is because the stairs to the 3rd floor are in the 2nd floor bathroom! My husband is an architect and we have the plans to turn the staircase to make the layout much more efficient.

When all of the work is completed, it will be a 4 bedroom, 2 bath (it was a 3 bedroom, 1 bath at purchase). The problem is, we need about $30k to finish this project. We do not currently have this cash available.

Do we borrow cash to finish the job so we can either refinance or sell and pay back the borrowed money with the estimated $41k equity gained. This feels risky to me because I’m a not 100% confident about the numbers.

Alternatively we will just continue to slowly DIY the renovations ourselves, but I feel like it is tying up our cash and time! THIS IS MY BIGGEST ISSUE. We would rather be focusing on our rental portfolio assets instead of this liability property. (We also both work full time w2 jobs and have two small children).

We did not have any real estate knowledge when we bought this house, and now we are looking for creative ideas to get us out of this mess. We do like the house and could live here for the next 30 years, but are looking for input from all of you creative real estate professionals because maybe you’ll have some ideas we haven’t thought about.

Thank you!

@Rich O'Neill I will keep that in mind for the 203k.  At this point we have already been in our house for about 2 years so I don't think it's relevant for this property.

Thanks for the insight on the local groups.  I will be checking them out in the upcoming months.  

@Rich O'Neill thank you. The HMLs make me a little nervous on my first deal, but I can see the value in using them. I am definitely open to that route if I can make sure the deal accounts for the interest like you said. We actually started the process of using a 203k loan for our current personal residence but we really struggled to find contractors that were willing to do the paperwork and ended up backing out of that. I’ve seen the calculators in action on a couple of the webinars and I’m definitely going to start playing around with them.

Are there any local groups you recommend getting involved with for networking? I’ve found a bunch and I’m not sure which ones are would make the best use of my time.

@Joseph ODonovan thank you. Right now I am only using the online tools like realtor.com, trulia, etc. I am interested in finding off-market deals eventually too.

@Joseph ODonovan Thank you. I am right down the road from you in Rutledge! I have also noticed that Elmwood is definitely block by block and we would have to spend some time getting to know this neighborhood. As I mentioned in some of my more recent comments, I was of the mindset that all cash was the best way to approach our first BRRRR deal, and now have been opened up to the idea of using financing, which would certainly get us into some better neighborhoods. I need to work through the math on some example deals if we were to use financing to get a better understanding of what the numbers would look like. Do you recommend the BP calculator? I have not signed up for a Pro membership yet but am highly considering it.

@Natalie Schanne I appreciate this information.  As I mentioned in some of my earlier comments, I was thinking that it would be better to use all cash on our first deal, which greatly limits our options.  Now that a few of you have recommended using that cash as a down payment with financing, I am re-evaluating what those numbers would look like.  That definitely opens up opportunities in different markets!

@Rich O'Neill Thank you!  I am aware that I need to call around and put in the work to find banks that will finance my deals, but do you know if they are generally willing to offer financing for properties that are in bad shape?  

My thinking was that if we paid all cash in the beginning, we would be able to buy better deals, because we could act faster and banks might not be willing to take the risk on homes in disrepair.  The idea of using that cash as a down payment is intriguing because it sounds like we could get our money to work harder for us.  We are still analyzing markets right now, so are not locked into criteria just yet.  And yes, both my husband and I have W2s with our employment, so I don't expect any issues on that end.