All Forum Posts by: Pam Pitts

@Franklin Romine Thank you!

Good Morning-

I'd like to pick the brains of the experts! 

The problem:  Jane Doe wants to sell but doesn't have the money to pay for new carpet/paint/gutter repair...  

Solution: Realtor providing repair solutions(or market ready solutions) for sellers by fronting funds or bringing in a crew to do the work. Realtor is "paid back" at closing...plus typical commission. 

Win/Win : Agent gets listing/Jane sells house ... hopefully agent also helps Jane on the buyer side later on... 

*** obviously there has to be equity in the home or this isn't going to work. 

Has anyone ever done this? 

My first 2 flips were inexpensive homes that were complete gut jobs (I MEAN COMPLETE)... I like to think of it as a great way to get a quick education on all things renovation, flipping, markets, costs, contractors, codes, FHA, ARV, stomach ulcers and insomnia. I scraped together $95k of my own money ( some cash form savings- some as part of a HELOC on my residence). I was not comfortable with dealing with HML being a newbie, and not really having enough margin to cover the cost of the interest. The key to HML is enough room to pay the 10%-12% interest, complete the flip in 120 days or so, and still make some money (obviously). So, HELOC may be one way if you have a home with some equity... some folks have taken loans on their 401k, others use credit cards... etc.

I would highly suggest.. do them one at a time. Spreading rehab capital across 2-3 total rehabs could quickly have you stretched too thin and not tracking towards being listed. 

I never lost money... but didn't make much either-- I comfort myself by saying, its the cost of a good education. 

Thank you Sarah Ziehr ! Wayne Brooks.. oh goodness.. you are exactly right. I had to look it up, but you nailed it. 

Just finishing a reno on a 2300 sf 4/2 in a historic/run down neighborhood. Meaning.. some homes have been restored to original luster ($350k), others are caving in ($14k).. then there is my house-- renovated (not restored) so should hit somewhere in the $150k-$170k range... so comps were tough with wide swings in pricing. 

I paid for the advice of an appraiser to guide my listing price. Heard something I have never heard before:

2 bedrooms downs stairs. Added a full bath off the master, and the other full bath is at the end a hallway. I created 2 additional bedrooms upstairs that was just open storage (I added framing, ductwork, electrical, closet, window) but no bath upstairs. 

Today I was told that for appraisal purposes the bedrooms upstairs won't "count" toward the value since there is no bathroom. They will obviously count as overall living space but not the same value as 2 bedrooms. Essentially, unless I add a bathroom(according to this appraiser), the money I invested in adding the bedrooms .. well it was wasted. I will get the appraisal back this week and will have to decide what to do if its super low.

Anyone ever heard of this? 

As I walked into my first rehab... I uttered "No guts, no glory" under my breath as I thought to myself.. "what the hell have you gotten yourself into now"... you will learn more in the next 3 months than you could EVER read or learn in a class. Regardless of what happens, you MUST do the next project. Go easy on yourself- you may trip over a dime to try to save a penny, you may overpay for a part of the project... but you are learning. I sold my first place after 4 buyers fell through and walked away with $10k profit. You will do great- the house looks like it has good bones. Keep us posted! 

Small houses  with little light I use - sherwin Williams Icicle flat- linen white trim (below)..Have also used Behr basic Taupe with Antique White trim-- its a nice pop against dark wood floors.  Used Sherwin Williams Agreeable grey in my place and I love it. All safe choices..

@Tom S. and @Elizabeth Colegrove-- thank you for your advise!

Hi Everyone-

I took a HELOC on my personal home to fund my first flip. All went fine for the first one- after expenses I basically broke even but I am OK with that- ONLY because its my first flip. I was able to completely pay back the HELOC, and start on my second flip. Purchased the second place outright for $28k, appraised at that time at $34k ($140k ARV) I really want to get 2 houses going at once... but my cashflow is tied up in this house.

I know about hard money but is there a way to tap into the $34k of equity I have in the home underway right now? I know you can only take a HELOC on a primary residence, and only take a construction loan BEFORE construction starts. I believe cash-out refi has a holding period regulation.

I realize there are hard money lenders, and P2P funding. Am I missing something?

Great job- hope it goes fast for you! Very impressive!