All Forum Posts by: Pam J.

oh and it's a HUD house. Also in case that's important.

The deed will be in our name- if that makes a difference. 

We are closing on our first deal with an investor. We are buying a fix&flip with their cash.

Should they wire the money directly to the closing company? Or should it come to us so we have a tax record of it being inside our bank account?

Thanks!!

After much research, and half a dozen offers outbid...We are under contract with our first flip (yay!)

We are purchasing the property and making the repairs with a hard money lender, so all cash. This is our first time working with an investor (and their first time investing in real estate). We have a great communication with them and all plan on learning a lot.

SO.

On this deal, we are purchasing to fix & flip, then giving the investor a percentage of the profit (plus a small interest % on their money while we flip).

The deal is:

Small 2b 1ba house

Purchase price $42,500

ARV $103k

Rehab costs ~$25k (mostly cosmetic, like new kitchen/bath, also new windows)

Which keeps us at 75% value. We realize we wont get rich with this one, but its a small, safe option in a hot neighborhood (average DOM is, like, a week.)

BUT- Rental here is also a hot commodity. We could rent for around $900/mo, and obviously rehab would be a lot less for rental-quality updates. Probably $6-8k.

I'd like to know how to present this option to our investors to see if they are interested. How would you structure a rental deal like that with an investor? I'd love to give them a short-term out (we purchase the property from them by getting a mortgage after X months) and a long term option (say, 3 years). In the end though we would like to own this property ourselves, not just manage it for someone else.

The point of this house is to get into the business, get our feet wet, and begin having our own cash reserve so we don't need an investor.

Any advice and experience welcome. We are new to this and open to learning!

Thanks!

we use cozy or cash (our tenants are close by and a few of them prefer cash). The wait time on cozy deposits is a bit annoying but the website is easy and set up for landlords. When I did taxes I just exported all of our rent history  from there.

Thank you @Greg H.

@Brie @Brie Schmidt thank you for your reply. this would be a cash transaction. To be crystal clear here- I am not interested in getting away with fraud, I am interested in becoming educated on real estate investments of all kinds.  I know house hacking is a term and strategy I’ve read about in the forums, and I was curious if this was a way to do that.

@Scott L. worded it better than I did- if there is a minimum, I just want to know what it is so we can decide if it’s doable for our family and our goals. If there is no minimum and others have gone this method to flip houses, I wanted to hear experiences and advice. 

We are looking for a house to flip *and* a duplex to house hack as our lease is up soon. We are a family with several young children so we need to be picky about where we live and what kind of live-in renovations we do. A nice HUD house was listed ( nice as in, not the ghetto, family neighborhood) but the first week of bids is only for owner occupants. It's a house we could stay in but not long term because of its size. And it's not our target neighborhood to raise the kids in.

In this scenario we would buy the house, perform the renovations and when our lease is up go live in it- but also put it on the market ASAP. And probably not spend much time there at all as three little kids can undo a renovation fast haha. We would only be physically living it in perhaps a matter of days. 

Has anyone done this? Thoughts? We don't want to be dishonest. Our lease is truly expiring, and we are looking for a house to flip. But we would not be doing this to live there permanently. We have no experience with HUD yet. Our agent isn't aware of a minimum stay requirement for owner occupants.

I’ve never owned a shared driveway but I did live in a rental that shared a driveway with a house that was owner occupied. Thankfully we were respectful of each other and the occasional times we were blocking each other’s way (parked to run in for something, or guests parked there not knowing it was shared). However, i could see how it could easily be an issue if the tenants or other driveway users didn’t get along or weren’t nice because it was a pain the the butt- who shovels it? Who maintains it? 

The concrete started cracking and lifting and the owner came to us asking if we knew if our landlord would answer his calls about helping him pay for it. That was awkward.

Personally I would want to meet the other owners/tenants of the driveway before I’d ever purchase a shared space with them. 

@Jay Belcher good point on labor costs. You’re right.

We discussed it last night and decided our target price needs to be a lot lower for us to feel comfortable. It sounds like a $40-44k target price and $40-44k rehab budget is (while still tight) more realistic