All Forum Posts by: Steven Perry

Thank you all for your feedback.  I will see what options the bank has to convert to permanent financing and then look at short seasoning requirement brokers.  I don't know if the construction loan will work because it may take longer for funds initially nullifying my ability to buy with "cash".

Hello All,

I need help! I have secured my 2nd property this year (and overall). The first one I was able to flip and turn a $20,000 profit and this second one I expect between a $35,000-$45,000 profit on pending any surprises. I am getting them at about 70-75% of ARV and after repairs they are at 75-80%. I am not excited about the fat 39.6% tax bill I am creating for myself (good news bad news about having a good day job). My current financing arrangement is as follows:

I have  a local bank who is giving me essentially a line of credit at 6% paying 1/2 a point and a 6 month call.  I am maxing out what he will give me at 2 properties at a time (approximately $400k).  I believe he would give me 12 month or even 15 month call but I don't believe he will give much more money until I have 5-10 flips under my belt. 

My question is how long do I have to hold onto the property before I could get a long term mortgage to keep the properties as rental properties.  I would want the mortgage to be based off of the new appraised value and not the initial purchase price (after I repair it) so that I can take advantage of the 20-25% equity I have in the property and have minimal or no money out of pocket. This way I can obtain rental income off of them and then ultimately sell at long term capital gains. The initial line of credit does not have a lien attached to the property so I technically own it "free and clear".  Also keeping in mind I don't want to keep my current banks financing for 12 months or more (if possible) because that limits my ability to purchase more properties.  Basically the quicker I can pay back the local bank the better so I can do more deals.

Any guidance is greatly appreciated! 

It looks amazing!  I don't know if you are married or not but having done two live in remodels with me and my wife I think I have pushed the envelope far enough!  No more for this guy :) Take advantage of it while you can!  Great job on the numbers and the finished project!

I am a newbie to the REI world. I closed purchase on my first flip property January 16th. We purchased it with a 6 month signature loan from a local bank with a .5% fee and 6% interest only. ARV Estimated at $215k - $15k (closing costs) - $3k (holding costs) - $7k (repairs carpet paint etc) - $163k loan = $27k in profit. We are under contract right now for $213k and our repair costs were $10k. We had some unanticipated plumbing issues and ended up replacing all of the appliances in the kitchen with new stainless steel. The buyer wants a quick close so the close date is set at March 6th which means we should turn nearly a $22k profit in 50 days!!!

We had ended up listing the price at $219k because of the upgraded appliances as well as some custom backsplash tile work.  There were 5 other identical units for sale in this townhome neighborhood all listed at $210-215k so we wanted to stand out with the upgrades.  The buyer wanted $6k of but had conventional financing and could close in 30 days.  I would have obviously rathered getting a stronger offer but between not being able to sell to an fha buyer (anti flipping rules) and the lightning quick turnaround time I couldn't turn it down for my first flip. 

I certainly learned a lot.  Especially buying a foreclosed property in Alaska in January that had been frozen up for several months, and the plumbing and heating roadblocks that come along with that.  It has been a great experience so far and I am excited to get that check once we close out in a month!

Congratulations Blake!  I am really happy for you and Natalie!  Great work!  You are going to be an awesome investor!