All Forum Posts by: Mike V.

Greg,
I decided to switch from buy and hold to flipping because my bank was balking at me having more than 5 mortgages (they want 6 mo reserves for all properties). I just sold my first flip on Thursday and made a net profit of 34K on a 118K purchase with 8K in rehab cost. 37 days from date of purchase to date of sale closing. Had to shop the buyer to several lenders until finding a local lender who looked beyond the 20%/ 20K profit restriction that is all over fannie and freddie loans. I have my second flip under contract and should profit around 27K but have to wait another month to close since the buyer is a FHA buyer and have to wait the 91 days.
So from my own limited but very recent experience it is very worth while.
PS - I am in no way bragging about these two flips but wanted to give actual numbers so that you have a better feel for what can be done. I realize that the next flip may not turn out so great.

Welcome Chris,
You sound a lot like me. Full time engineer and I started investing in '07 and am on my 5th deal. Great way to build wealth and your engineering skills will be right at home in this game. This is the only RE website that I actively participate in- awesome job Josh and all those that regularly contribute!

I misunderstood or they misspoke. What they are doing is offering possession before closing.

I was scheduled to close on an REO last Friday but couldn't because the one of 10 deeds of trust was not released. Apparently it was left over from the owner before the currently foreclosed owner. Anyway I'm anxious to get going but the bank can't give me a date of when they will get all the proper paperwork (the title company that filed the deed is now out of business). So the bank has offered to transfer ownership immediately and close as soon as the deed is released. What are my liabilities in doing this????
Thanks

Allen,
I joined Southside Investors Club a couple of months ago and have been very impressed. Our meeting this month had St. Louis City Mayor Francis Slay as the guest speaker and he spent over an hour speaking to the state of the City (a week before hosting the All Star game no less). A couple of months ago it was the City Clerk who spoke for over 2 hours on the eviction process. It isn't just a bunch of gurus selling crap. I have made some good contacts with contractors and wholesalers. Everyone has been very approachable and friendly, I can't say enough about the group. The first meeting is free and then you can join for $75 or just pay $10/meeting.

Mine have all been MLS, either REO or HUD. I used cash on one and construction loans on the other. Local small bank and I get a construction loan. I have to put 20% down of purchase price but then they will give me 80% of ARV for 9mo currently at 7% with one point. If I decide to rent the house I refinance otherwise sell and pay off the construction loan.

One nice suprise I had on the latest HUD home was that the Lead report included a lot of exposed/flaking lead paint on the soffit and fasica and HUD paid 2K to have it all scrapped and primed. The one before that they paid to have termites treated. The two that I have bought have been for 80% and 85% of an already reduced asking price - 54% and 77% of original asking price.

Jon,
Here are the details. Purchased for 118K, rehab for 26K, ARV 205K. Rent ~$1600. I plan to rehab and resell but may hold on to it as a rental depending on what I find out from my banker - my bank is hinting at future rules not allowing me to use my collected rent against income anymore unless I have had that property on my last 2 years tax returns.

Update, I made the same offer for the third time (this time after a 10% price reduction) and now have a contract on the house. For all you data freaks out there, my offer was 85% of the newly reduced price and was accepted in the morning of the first day of allowed bidding.

First your credit score has nothing to do with debt to income ratio. The credit bureaus have no idea what your income is, just your debt and how much of that debt is being used. Your score will improve if you have 10K in cc debt spread over 10 cards with limits of 10K each versus just one card maxed out at 10K. So find out why your score is so low and work on raising it.
Second, find a bank that will count your rent against your debt payments. My bank lets me count 70% of my monthly collected rent against any debt payments. If you buy right you should be able to increase not decrease your purchasing ability.