All Forum Posts by: Sydnie E.

Hello BP,

I interested in purchasing a home currently listed as a short sale. The home is on the market for 295,000. Based on Redfin the current value of the home is 394,000. This is my first deal and I'm wondering if I purchase this home with a private lender for the sale price of 295,000 how would I gain the actual value of the home? I know that a short sale means the home owner owes more then what the property is worth but would it be possible to refinance in a year or so and gain the actual value of the home? I'm confused on how this would work. Can anyone clarify? Any advise is greatly appreciated.

Bill,

Thank you for replying, I didn't add in the hauling or permits etc. that would be needed. Do you have a list of items that you are willing to provide of the various cost that you use to accurately figure the cost of flipping property. The ARV is based on the surrounding homes that are selling. With renovation the home may sell for higher. Those that are remodeled are selling are going for 415,000-435,000. but I wanted to analyze with a lower number to be safe. The lender is willing to hold for 6-12 months but I'm hoping to get it sold in half that time. I appreciate any information that you may provide that will assist in the most accurate figures.

Jason,

The lender ranges from 10-15% but I added an additional percentage because I am a new investor just to make the deal more attractive. The cost of being a newbie. Your right lending seems to be the way to go. One day I hope to be in the position to do just that.

Sydnie

Are you referring to the repairs that will be included?

Hello BP,

I am working on my first deal and have figured a few numbers. I wanted to know if I have accounted for all areas. Is there anything that I'm missing? Also, is there anywhere I can find a standard contract or would I need to have an attorney create one?

Asking Price 260,000
ARV= 386,000
Purchase Price 240,200
Purchase Cost 2% 4804
Rehab Cost 13% 31,226
Holding Cost 4% 9608
Hard Money 17% 40834
Realtor 6% 23160
Profit= 36,168

Thanks,
Sydnie

I am definitely interested!!!!!!!

Forgive me I said profit they add additional interest on the borrowed amount.

Sydnie

Thank you Jon for breaking that down for me. I trying to determine the fastest and best way to acquire property for flipping purposes. Here in California the mortgage company's are moving very fast.

Bill yes the investment companies would take part of the profits just as a HML.

I've heard that with investment financing the lender focus on the property for qualifying for a loan. With that no money our of pocket and hard money usually covers up to 70% of the requested amount. Investment financing would also not be subject to your personally credit but us the home value as collateral. Is this correct?

Is there a difference between hard money lending and investment financing? What are the advantages and disadvantages of the two?

Michael , your location indicates Brentwood, California or are you in the Bay Area?