All Forum Posts by: Khaled Helmi

Congratulations - great job!

Would be curious what you feel your biggest mistakes were in the first flip?  I think there are some great lessons learned in what went wrong...

Way too thin

 You pay premium on new construction, so to give it two years to appreciate from when you purchase it doesn't seem like enough time unless you hit the jackpot in terms of the area. But generally, you shouldn't be using hitting the jackpot as your investment philosophy.

also as a realtor, I'd remember that a 2-year-old house is kind of one of those tweeners that is not going to appeal to the new construction buyer as they want to be the first to own/buy a house in an area and they don't want it previously occupied.  it's also going to be less appealing to the standard non-new construction buyer as it's going to be pricier than a similar existing house in the are, and so the appeal will be less unless the price was much lower to compete area pricing of existing homes.

So in my opinion you'd be making a mistake buying new construction and expecting to sell it in 2 years for a profit

HUD is a pain as it's really hard to get your money back if there are any issues because all written into their contracts. I lost a $1,500 deposit to a HUD deal earlier when I decided to back out, so I know the feeling.

as long as you learn from the mistake and the mistake isn't big enough to get you out of the game, it's par for this course in real estate investing so I wish you the best!

@Jamie Rosen Did you guys have a financing contingency?  If so, assuming you didnt exceed your timeframe, you should get the deposit back

Actually I'm not criticizing you at all on liquidating your IRA to invest. I think we have a bit of a taboo in our society about touching IRAs, when in fact if you're responsibly investing them it actually may be a MUCH BETTER decision than leaving them in the stock market. If you're making more than you could make in the stock market AND building up your own business & after-tax resources then I'm all for it - and it looks like you are.

Congrats!

Did did you liquidate your IRA or did you self direct your IRA? as in, did you take the tax hit to your IRA to convert it into after-tax cash or are you just self-directing an existing IRA without the tax it?

I think the key is the delivery - I'm not a huge fan of "We're investors so we dont offer retail" as that translates to "We're investors so we're looking to make our money off of you".

Instead, I'd phrase it like, "I wish I could offer you top-dollar but as an investor I'm looking to renovate and sell this house so I need some room to make my profit.  I know you want more for your house, but this is the best I can give you.  I understand if you want to check out more offers and I would definitely do that if I were you, and if you dont find a better offer let me know and maybe we can make a deal that's good for both of us"

I think that really frames your side much better

Could you make it work with four units if you got in trouble with the city and they forced you to keep it as a 4-unit?

That would be my biggest question.

With four units what do the numbers look like? (Purchase, Reno, rent)

I'm just curious, why has it been a bad experience so far? Is it because you have to file an eviction and go through that effort? Or other reasons?

I think one thing to remember is that whenever you do something new there's always difficulties as you're doing everything for the first time - so it's probably slow, painful, and not efficient.  But that's the only way to grow. putting yourself outside of your comfort zone is the only way that eventually this stuffed becomes your comfort zone.

Keep your long-term goals and the big picture in mind - you are not only living for free you are also building Equity every single month.