All Forum Posts by: Viktor Stakhov

There have been a BP meetup about 2 weeks ago in Lakewood. Had a good time to meet some good people from our area.

I would recommend you to set up keyword alerts so you know what's going on Seattle area. This is also a good place to keep your eye on - http://www.biggerpockets.com/forums/521-events-and...

Welcome to community!

@Viktor R. Right, we did look at what was on market at that time and it was either outdated or completely redone. We should have kept bathrooms and just upgraded cabinets.

I think we really overdid it, although we were very conservative money-wise doing lots of work ourselves. What killed the deal was an acquisition. It ended up being 70% of ARV with rehab cost on top.

Putting money aside it was a great project and we've learned a lot. 

@Jessica S. those doors had best of us. It took 2 of us pretty much the whole day and it would've been more efficient to pay $350 and have it done by pro while working on something else.

@Damon Armstrong We bought it on auction for 225K and spent about 35K on rehab. Holding costs are 2,000 per month + utilities. Basically with all listing fees and other our brake even point is around 300K. After a price reduction it is listed at 314.5K

@Aaron Reynolds It's a little over a month since we've finished the house and got it on market. It is still there.

Yes, too many partners and it's not very good. We had to start somehow and we didn't have much so decided to pull what we have together, make less, but start.

Our REA (real estate agent), my brother and I agreed to bring the same amount of money to the table. Another brother couldn't bring anything, but he had to be more involved by working on a project, so that all profits would be split equally among 4 of us + REA had a reduced listing fee.

The way everything ended up was not the way we expected. For 2 months every day after work and Saturdays 3 of us (brothers) were going to the project and working on it. Although one brother didn't bring anything to the table we ended up working as much as he did, but it's fine. We are happy to help him out. 

We've only seen our REA 3 times helping with a project. It wouldn't be a problem either, but since he gets paid for his professional work by still charging a fee, I feel robbed when I compare 3 days to 2 months with the idea to split everything equally. 

This is truly the biggest mistake and lack of writing everything on paper.

Work load was simple. We had an idea of what we want to do and what we like. Having a BA in Architecture I was making many decisions after discussing them with partners. One brother worked our financial side of it, and another brought most of the constructors that we used. We did a lot of work ourselves and 3 of us really knew what we were doing since we do it for living.

Hi guys, just wanted to share my flipping experience.

Two of my brothers, myself, and our RE agent got together to do our first flip. We discussed our plans and strategies many times and went through number of houses on MLS. Whoever lives in Seattle they know that it's nearly impossible to find something good due to the market.

So we decided to go with an auction at a court house and a hard money lender. Who could think that every other home buyer these days buys his property on auction (at least that's how it seems to be in Seattle). We ended up paying more than we should have. Please, be smarted than we were, do your due diligence and STICK TO YOUR NUMBERS. If you can't win a property it doesn't mean you have to overpay for it.

We ended up getting a 1979 3/2.25 split level house that had an original kitchen cabinets, aluminum windows, and popcorn ceilings.

We ended up gutting the house down to drywall. Upgraded all windows and doors (except an entry door). Bathrooms and kitchen were fully upgraded - all cabinets, tile, fixtures, counter tops, and appliances are new. New engineered hardwood/carpet/vinyl throughout the house, as well as a fresh coat of paint on the inside and outside.

Overall the flipping took us little less than 2 months considering that we worked after our day jobs. Most of the work we were able to do ourselves since 3 of us (2 brothers and I) do this type of work for living. We've hired a few contractors to do popcorn removal and drywall patching, painting, and carpet installation.

We worked well together as a family. But since we brought one more partner and no one bothered to write anything down (we thought we knew each other well enough) we've learned some pricy lessons.

Things to remember for next time:

• Never partner with anyone unless it is extremely necessary.
• More partners you bring to the table - less money you make.
• Describe what everyone has to bring to the table and adjust your profits accordingly.
• Never rely on ARV from RE agents.
• Have everything written on a paper even if you partner with you brother/sister or closest friend ever.
• If you are rehabbing, spend some time at the end of the day and plan for tomorrow.
• Do everything that needs to be done right, but don't get carried away with too many things that don't bring the ARV up.
• Even if you want to save money, it could make more sense to hire a professional to replace your garage door.
• Make money when you buy a property and not when you sell it.
• Don’t scare away potential buyers with your overpriced house.

Here are some pictures of the house.

We've already installed new windows and trimmed them. Garage door also had to be replaced.

Should have taken a picture with old cabinets, but now they are gone. Wall/pantry that separated kitchen from living room was demoed (you still can see on a floor where it used to be). New partition between sliding door and kitchen.

@Nick Fitzpatrick Exactly. 3.5% FHA is what I have right now and is what I would love to have for my next purchase.

Yes, I do plan to eventually get myself back into SFR so my kids would have a yard to play at.

@Kevin Davenport There are definitely benefits in buying SFR, but in my case I don't think the use of 4 loans would be maximized.

In order for me to have 80K I have to sell a house, instead of equity. I've been to a bank. They have their system of evaluating homes and they don't price it too high due to REOs previously sold in area.

I bought my house in 2012. It was bank owned and I paid 127K. Renting it out I would be able to get $1500 a month. In a current market I should be able to sell it for 220K roughly. Also being a carpenter and remodeling houses for living, I overdid my own house and it makes more sense to sell it instead of renting it out. 

You've got a great strategy, but it seems like you might be working with somewhat cheaper houses in your area.

@Gerald Harris @Viktor R.   I would really consider buying something bigger than 4-plex down the road. Although, it would be considered a commercial loan and will require a bigger down payment. With a job I have it will take me a while to put those funds together. How did you grow so big in such relatively short time?

Hi guys,

I need some words of wisdom from those who've done it.

I've bought myself a primary residence in 2012 and now it's been over two years since I live there. I am half way done with rehabbing the place and plan to finish everything up and put it on a market in March 2015. Having a fixer-upper to start with I will be able to clear around 80K.

My log term goal is to have enough rental properties to replace my day job income. I really need some help to start it right. Living in Greater Seattle area doesn't leave me with too many options and returns are not the best.

So here are my ideas:

1. 1. Sell the house. Move to apartments and buy 4-plex to start with. Something that would require some TLC (being a carpenter I can do a lot myself). It would be my primer residence and would rent other 3 units. 80K would be used as a down payment and money to bring it up to shape. Since I only can have 4 loan on my name I though it would be good to maximize the use of them.

1. 2. Pull out equity and use it as a down, but keep a primary residence. This way I won't have 80K since bank usually evaluates lower than selling price and give only 80-90% of home worth.

1. 3. Sell PR, buy a duplex, keep some money in pocket and look for next duplex in 6 months.
2. 4. 1031 Exchange? 

In case of getting 4-plex as a primary residence, I would consider something within 1 hour of drive to Seattle, since I work there. If I were going to keep my PR and use equity I would consider anything within 2 hours of drive, which would give me a chance to get something for a better price and manage the property myself.

What you think would be the best way to reach the goal and am I on a right track?

Please share your thoughts and advice.