All Forum Posts by: Nicholas Smith

Hey man, don't beat yourself up about this.  At least you are in the game.  As a realtor and investor, I hear many people say that they want to buy real estate.  But most of them never actually pull the trigger.  So you've already accomplished what many people never will.  And getting started in real estate investing or anything worthwhile for that matter is never going to be a straight path.  But start and continue networking with other professionals, learn how to analyze deals, and keep pushing.  You'll eventually get there.  I do have one suggestion.  Pick one to two areas of real estate investing that fit and interest you and become experts in those areas.  The shiny object syndrome is real and deadly!  Best wishes to you in your endeavors!! 

My first flip was somewhat similar.  I found out on my way into the closing that my hard money lender's appraisal came back low.  That was the most nerve wrecking 15 minutes of my life!  Numbers were much smaller than yours but the same principle.  But I had to get resourceful to purchase and finish the project.  I took out some business unsecured credit credit, borrowed against equity in vehicles, took out a personal unsecured loan, etc.  Maybe you try to get this thing under contract again and show this to a contractor.  You might be able to convince them to get paid at least partially out of escrow?  You have to think outside the box sometimes.  And btw, when I sold my 1st flip, it appraised substantially higher than the hard money lender's appraisal.  Their appraisals are intentionally conservative.  Keep that in mind.

What methods are you using to find your properties? If you're just looking on the MLS, you're primarily going to be seeing properties at retail prices. And nationally, in the single family space which is anything 1 to 4 units, inventory is extremely low. Are you looking at any off market deals?

Depending on price point, 3% may not be enough to entice a good agent/ broker to work with you consistently.  If your working with properties in the $20,000 to $30,000 range, 3% isn't much especially when you consider the typical agent has some type of split with their broker.  So I'd work with your broker and establish some type of minimum commission they'd receive.  And keep in mind that it's still all about building the relationship.  Hope this helps!  

Welcome Kevin! I am closing on the purchase of my first flip this Friday. So use BP for as much as you can. I'd definitely be interested to learn a little more about what you do for the developer you work for. I did some new construction at my previous job and I love it!

@Luc Boiron I definitely will..  I'm dealing with contractor dilemnas now.. lol.  But I know I'll get through it..  

@Luc Boiron and @Ronan M.

Thank you both for your feedback.  I have decided to go through with the hard money lender.  Project should be underway in early April.  So I'm definitely looking forward to it.  Again, thanks for your words of advice!

Thanks for your feedback Luc!!!  

Hello BP, 

I would appreciate any feedback or suggestions on the following scenario.  I'm under contract for my first fix and flip in East Chicago, IN.

Purchase Price:  $50,000

Rehab Costs: $30,000

ARV: $115,000

I have two financing options that I'm considering.

Option 1 - Hard Money

APR - 13.5%

Origination Fee - $3,000

Appraisal/ Inspection Fee - $350

Option 2 - Offer from family members (Aunt & Uncle)

Family members bring $40,000 to the table

I bring remaining $40,000 plus holding costs

Split sales proceeds on a 50/50 basis

Other pertinent details: I'm hoping to hold the property no more than 6 months. I am a licensed real estate broker so I'm representing myself in the purchase (estate sale on MLS). I will be listing the property once rehab is complete. And I will have to manage the project because my family member is not in the area.

Which option would you all suggest??  Any input would be greatly appreciated.

Thanks,

Nick

Originally posted by @Scot Howat:

Welcome to BP, network network network!

 Thanks for the welcome Scot!!!!