All Forum Posts by: Michael Robinson

Investment Info:

Single-family residence buy & hold investment in Lithonia.

Purchase price: $62,000
Cash invested: $7,000

I was able to purchase the house on foreclosure several years back. Since I've updated everything except for the upstairs bathrooms.

What made you interested in investing in this type of deal?

I was fresh out of the military and moving back home, I knew I would need a place to live. I knew other investors were getting houses in Atlanta around 30K which was an unbelievable deal. This particular property had a personal meaning to me as I grew up just down the street when I was younger and the neighborhood was the top of the line back then. I knew the neighborhood would hover around 200K normally so I took a shot in the dark and what do you know. Houses are starting to sell around 190K.

How did you find this deal and how did you negotiate it?

I found this deal on MLS back in 2013-2014. There were plenty of foreclosures to choose from back then. I originally lost the bid I placed on the house but after a week or so, I got a call asking if I was still interested. The winning bidders financing fell through and I was next in line. Pure luck if you ask me.

How did you finance this deal?

It was a cash deal so I dug deep in my savings from deploying in 2012 and borrowed some money from family.

How did you add value to the deal?

Soon as I purchased I gutted the old 70s kitchen and installed hardwoods and tile on the main level. Along with repainting cabinets and installing new appliances.

What was the outcome?

I live the house today but I've been working on converting the full 1100sqft basement into a 2 bedroom apartment. I'm not sure if I will just rent it long term or short term.

Lessons learned? Challenges?

I've learned how useful the buy and hold method can be. Also, working with local enforcement to code the basement for living has been an experience I won't forget.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

I did have an agent that helped me put in the bed and showed me other foreclosed properties but on this deal, I did all the leg work. I just needed the agent to submit my bid and let me in the house. I located the property ran the numbers to see if it made sense on my own.

I know it's been a while but I figured I'd update anyone who was interested in what happened with the deal I was pursuing.. I wasn't able to close deal due to another investor grabbing the property before I could get things together. I believe it was a day or two after I viewed the property that there was an cash offer that the owner accepted. It was definitely disappointing to hear but I did learn a lot from the process. It took me a little longer than it probably should have to crunch the numbers on the property but I definitely wanted to be confident in the deal. However, I was able to FINALLY talk my family into working the deal with me but after I missed the opportunity I realized I would want to do financing alone or without family at least for now. It's just more stress than I can handle. The property was on MLS which I review everyday and I was able to see how important it is to be able to move quickly when there is a opportunity out there. I did meet a Private Money Lender through this post also who gave me a few pointers so that was nothing but positive! All in all it was great experience. I can't wait to find the next property and use what I learned from this deal. A big thank you to everyone that chimed in on this post also! You guys make this community what it is.

@Paul Bowers I took your advice and I'm pitching the deal to a family member to see if we can partner up on this. We are going to check out the property later today. Wish me luck!

@Andrew Postell I'm not to familiar with the FHA/Conventional renovation loan process or requirements but I would think this property is eligible. The house is selling for half the price of the other houses in the neighborhood, so I think the equity is there. I'm meeting with a mortgage broker tomorrow and I'm hoping he can explain or even offer this sort of loan.

@Jeff Copeland Thank you for that break down. 

Seems I was a bit nieve counting out other financing options. I've started reaching out to a few mortgage brokers to see what sort of mortgages would fit in my situation but with everything you've explained here I bet the list is REAL short if any. I know for a fact that one of the bathrooms isn't in working condition but I'm not sure they listed it in the property description. 

That puts me in a real pickle. Even if wanted to look at hard money or any other sort of financing option I'm behind the 8-ball. I haven't directly flipped only through shadowing family members who used their own money.

I would hate to see this deal pass me by considering I know there is about 30-40k worth of profit in there.

Hello BiggerPockets Community.

Let me first apologize because I haven't done much research on this topic, which seems backwards but I will go back after posting this and dig through discussions (don't shun me please). I'm just so anxious that I couldn't help myself. 

I have my eye on a property that I think that has a decent upside to it. Due to not really knowing any hard money lenders or not feeling too comfortable with creative financing. I've opted to mortgage the property, put down my 20% and use the rest of my funds for rehab. Comparing the comps in the area, if done right it would be the larger of the properties up for sale or recently sold at the time of completion so I could be looking at a nice little profit for my first time. 

My question to the community is, is this a common way to start out flipping in order to gain capital for future deals? What things should I pay close attention to so that I don't get caught in a pickle during this process?

Also, if you know any one who may be able to suggest a decent mortgage broker that has worked with a first time borrower that would be awesome and GREATLY appreciated. (I'm fresh out of a credit rehab if that matters)

I have to move quickly on this too.. I noticed that the other comps were bought and flipped by the same guy, I'm just hoping he's waiting for one of them to sell before buying the one I'm eyeing. Thanks.

@Chris Gonzales Im trying out wholesaling myself. Just got a list and plan to mail out some yellow letters this weekend. I think wholesaling is great way to start in REI because of the little money that it requires. In my thinking, a lot of people start looking at REI but feel that because of a lack of funds or time its something they cant actually do. Im here to tell you, you can do it. Im pretty sure people with more experience than I will chime in but just remember most people are sharing there personal opinion from what they have experienced. You can have your own experience and you own opinion. Just get you a list together rather that be from probate, listsource.com or whatever. Just get started, don't over think it which I know is way easier said then done.

I know I seem all over the place but I thought I would give you guys a heads up on what I have been doing. So originally Im from GA a small town outside the perimeter of Atlanta. Ive decided to use my parents (where I grew up) zipcode to get a list of houses from list source. I know the area really well so since I know the market why not try to get a deal. Ive already merged the list to letters and plan to mail out over the weekend. I figured if I get some calls I can have my parents be my boots on the ground. They have already agreed so things seem like they will work out. I have never tried wholesaling before so Ive invested a little money just to see. I will be going back over my material on wholesaling so Im ready if a call comes. 

Fingers Crossed

@Darrie W. Bennett thanks for that tip. I will definitely get some reading done! 

@Andrew Bosworth

@Andrew Bosworth

@Andrew Bosworth

@Andrew Bosworth I will definitely do my homework before buying in the Harrisburg are. Where in PA do you invest?

Since Im moving to NYC to finish school. I just thought this would be a opportunity to get in markets surrounding the city like Allentown, PA or maybe Harrisburg, PA there are plenty. I hoping to get a rental for around 20k renovate, rent and then pull the equity to do the next. If anybody has any type of advice especially pertaining on how to get from where I am at to my goal.

Much is appreciated. 

Thank You Guys