All Forum Posts by: Jeni L.

Has anyone explored Dodd Frank implications in partial notes?

If I buy a note, I can inspect the note for Dodd Frank compliance and request the note be restructured before assumption if need be.

If I buy a partial note, I verify that the note will be assigned in entirety to me for a set period of time when I assign it back in order to ensure that my note is secured by a first position against real estate.  In this instance, should the same Dodd Frank qualifications for the home owner apply?

The 70% rule probably also takes in to account the holding costs like utilities and a few months of property taxes that a non-rehabber wouldn't consider when evaluating a distressed deal. 

I think I've set a reasonable figure for this flip.  Thoughts, anyone?

Thank y'all so much.

Here's more info:

very desirable neighborhood
2229 sq ft
brick exterior
3-4 bedroom, 3 full bath
built in 1969
new roof 5 years ago
HVAC replaced 10-12 years ago, no problems
fireplace, gas heat/ water heater, electric appliances, city sewer, crawl space / full attic, 2 small storage buildings out back, metal carport attached to house

Pics:
https://www.dropbox.com/sh/9okdqd6lj9olk1w/AACeDvF5R133So7URcPnUUoqa

Work required:
pull up carpet, replace wallpaper in 2 bathrooms [apprx: $13,000]
modernize kitchen [approx: $8,000]
modernize one full bath [apprx: $4,000]
wood paneling in living room could be painted or replaced with drywall [apprx $1000]
slight water damage in mother-in-law suite has been repaired and roof replaced, but visible spot in ceiling remains [apprx: $500]

Estimated repairs:$26,500
Holding/selling costs: Est. $15,000 (Edit to your experience)
ARV: $206,000 - $215,000

ARV Comps:
1- Distance: .6 miles
Sale date: 5/2014
Stats: 3046 sqft incl basement, 4/3 full, 2 half baths
Price: $90/ sq ft

2- Distance .4 miles
Sale date: 5/2014
Stats: 1800 sqft, 3/2
Price: $91/ sq ft

3- Distance: .5 miles
Sale date: 5/2014
Stats: 3600 sqft incl basement, 4/3
Price: $86/sq ft

4- Distance: .2 miles
Sale date: 4/2014
Stats: 1700 sqft, 3/2
Price: $93/ sq ft

5- Distance: .3 miles
Sale date: 6/2014
Stats: 1700 sq ft, 3/2
Price: $96/sqft

6- Distance: .3 miles
Sale date: 6/2014
Stats: 1350 sqfr, 3/2
Price: $98/ sqft

I'll do a double closing - I don't want to do the rehab, but I have a rehab buyer available.  Rehab buyer has been known to circumvent assigned contracts to be able to do the deal directly himself, so I'd prefer a double closing to ensure I get paid. 

Seller inherited the house when her mother died 3 months ago.  She has no use for the house. 

I'm going to read up on the 70% rule. All the flip investors I talked to said they're looking for $15-20K profit for all ARV under $250k. One guy said he holds out for 20% on ARV for everything above $100k purchase price.

Hey all,

I've been a rental holder/landlord for 7 years, but I'm new to the wholesale scene.

I've networked with rehab/flip buyers.  I found a house that meets my buyer's specs exactly.  

He says he wants a minimum of $15k profit and a less-than-6-month rehab.The neighborhood is highly desirable.  Beautiful old houses with a high rehab/resale rate.

I don't have it under contract yet, but I have the cash to do a double closing.  

Here are the numbers I'd like to offer to my buyer:

Purchase Price: $130,000

Estimated repairs:$26,500

Buying/Holding/selling costs: Est. $15,000 (Edit to your experience)

ARV: $206,000 - $215,000

Profit = $34,500 - $43,000

ARV is based on 6 comps within .5 mile sold in the last 3 months. Work required involves pulling up carpet in favor of new floors, updating one bathroom, and updating the kitchen.

Here's the potential deal breaker: this neighborhood has a very defined split price for FMV based on all the old charming houses whose original owners are moving to assisted care or passing away vs the FMV for the newly rehabbed houses. I don't know how low I can get the contract. $130k is way above FMV based on the "as-is" comps. But still highly profitable based on the ARV comps.

Thoughts?

How are you as a property manager? Are you good at vetting your tenants? Do you have a list of reliable contractors ready to respond to work orders? Or do you have a property manager that you can trust and afford?

I have a 14-unit complex of 1 bedrooms and I love it.  Love love love it. The complex is in semi-rural northwest GA, all 1 bedroom and roughly 575 sqft, located about 6 miles from "downtown". 

When I bought it under foreclosure, the units weren't in good shape, the vacancy rate was high, repair costs were high, and eviction rates were ridiculous.  I rehabbed each unit adding manufactured hardwood floors, new fixtures, new countertops, new bathrooms, and fresh paint.  I raised rent.  Within a month of completely the rehab, I was at full occupancy and on a waiting list. My tenants are mostly single.  About 1/3 are retired on fixed incomes; they've been with me years and don't foresee moving any time soon. About 1/4 are young newlyweds who only stay a year or so with me. The remaining half are average working folks who love the community I've built. Three have told me they intend to stay for life. Two tenants have not renewed their lease in the past year, but their units were filled in less than 24 hours. 

Multi-family properties in lower rent ranges are not for the faint of heart.  But I love what I do and my rent roll is more than worth it to me. 

Hey, thanks!

Helloooo.  Long time lurker - I appreciate everyone's shared experiences!

I've been investing in northwest Georgia since 2007.

I own multi-family rentals, which I manage myself.  I have several notes.  I'm getting in to wholesaling (assigning contracts) to stay active in the market but avoid the headache of flipping/holds.

Question for y'all: how do I anonymize my profile?  I didn't realize when I signed up that my full name and hometown would be visible to all.  Nothing to hide; I'm simply more comfortable with using initials or a handle.   

This may seem obvious, but I want to be certain.

Can I use my business name (which is an S-corp) on the purchase agreement when wholesaling? 

The plan is to assign contracts and/or double close only with no flips/holds.

Thanks!

Excellent!

Thank you.  I think you covered even the questions I didn't know how to ask.