All Forum Posts by: Mike V.

Bill,
I wish I could tell you that was true but my rehab was double my purchase price. Still was enough profit to cover my down payment and closing cost on a SFR rental just a mile from my house that I just leased yesterday for $1300/mo. Got to reinvest that profit fast before my wife finds a better use for it.

I have run into this situation or a close varient to it on the last 3 home sold. Typically two appraisals and some form of proof - spreadsheats or construction loan draw record. At my price points 100-150K I would say 90% of the offers are from FHA buyers. I do like the idea of pushing them toward a good underwriter. Anyone want to share how they push? I offered my last buyer $500 to go with my underwriter and they passed. I guess more is better but how much more?

Wow!!

On my first rehab the painter offered to pick up the paint of which I had a color code for. Unfortunately, the code was for 1 gallon and he bought a 5 gallon bucket. I didn't catch it till he was halfway done with the exterior. He wondered why my "Desert sand" looked like regular "Off White"
I buy all the paint from now on.

Cliff,
First, thanks for serving our country.
The best way to make friends with a banker is to make them money. Beg and plead to get the first loan and them make sure you deliver. It took some convincing to get my first construction loan but after my banker saw that I was serious (completing projects on time and on budget and selling for a good profit) she now more readily finances my deals.

Local bank - gives me construction loans for rehabs. They loan me 80% of purchase and 100% of the rehab. Rehab money is held at a local title company that handles all the dispersment including the 1099s at the end of the year.

Check with your local utilities to see what kind of fines they can stick you with for having bypassed meters. I have heard of some pretty outragious charges for grow houses.

Be careful about trying to gain the advantage by doing this. I have talked to more than one investor who was sure the person they lost the last HUD home to was playing this game and they were going to turn them in. Could be all talk but I don't think its worth tangling with the government over. Too many other good deals out there to risk it. You can do everything legit and still make good money and sleep at night.

I would recommend whatever you can get for your situation. I only do several a year so I hold out for the really good deals. I have an associated who does this full time - 50 or more a year and he is perfectly happy making 7-10% and make his money on volume. Just depends what your strategy and your market conditions dictate.

In mid 2008 the number of HUD homes currently on the market in my state (Missouri) was in the upper 500s and broke through the 600 level by end of 2008. We just surpassed 800 last month. And from my small farm area I can attest to the fact that HUD is not sitting on these - they are usually priced very competitively and sell before the first markdown at 30 days.

Steve,
Very cool story. I love the quick sale not only because it frees up cash to do another but also the psychological impact of knowing you did it right.