All Forum Posts by: Tom Kuhen

Welcome to BiggerPockets @Ben Kiss,

It's nice to see another local on here. I'm relatively new to real estate as well, but if you have any questions, feel free to send me a message, and I'll help out however I can. I'm sure we'll bump into each other around the forums, or possibly at a local meeting. Best of luck!

Happy investing,

Tom Kuhen

Mark Gallagher I didn't know that. I was under the impression that you had to find a contractor that had some form of registration/ certification in order to work on a home that has a 203(k) loan on it. Are there any qualifications that they do need, such as being licensed in the city, or having insurance? Or can you just hire a handyman/ do it yourself. I've heard that you couldn't do that, but I was misinformed about other things, so I thought I might ask about that too.

Mark Gallagher You are correct, I misspoke(mistyped?) on that, I did mean that in regards the 203(k) loan. I know good, loyal, honest contractors can be difficult to find, and I've heard it's not any better using ones that work with buyers who use FHA financing.

@Robert Quinn Thanks for reaching out and the advice. Unfortunately, I've heard a lot of stories about contractors doing sub-par work on HUD homes. Don't you, as the home-owner, get to release the funds in segments after they complete each phase? I figured that would help to mitigate those situations.

@Darrell Shepherd I've commonly heard of 90 days before you could sell it again and profit "x" amount from it, but 60 would be even better. All the numbers I ran as far as holding costs, were calculated for 6 months, assuming 2-3 in rehab, and 3 on the market just in case. That being said, overestimating my budget and timeline and still being able to come out with a good profit, shows me that it's a good deal, especially for my first project. I'm afraid of it going to the wolves as soon as the investment period is open, thus the reason I'm considering buying it as an owner-occupant. I used a generic mortgage calculator and about 66% of it was in taxes (this property is just over $6000). The POS hasn't been completed, and I'm not sure what to expect for that.

@Lincoln Coverdale Thank you for the advice. I've pulled a few sold / listed comps., and I've noticed that the ones that aren't selling, are listed for 10-20k more than what I projected my ARV to be, and one in particular is too over the top in my opinion. The ones that's have sold, are right what I predicted mine to be, and some aren't even updated as nice as mine would be.

That's why I'm trying to decide if it's better to bid as an owner-occupant and move in, since I'd have first dibs on the property. Even if it did get bid up a few thousand dollars, I think it would still be profitable and worth it (depends on who you ask though). I'm geographically familiar with those areas I lived in South Euclid and Lyndhurst each for a year. How are those markets looking?

I've read about an 8-11% discount from the listed price, as well as going as low as 15%, primarily on properties that are fresh on the market. I've also heard of them going down 50% after multiple price reductions / DOM. The property condition report state that it has electrical damage, and plumbing / sewer/ drain damage, all which was calculated into the rehab budget, even with some extra wiggle room. It's difficult to know exactly what is wrong though since all of the utilities are off. If you don't mind me asking, how did you finance it? It's listed at 50k+ but I don't have 10k as a down payment via a traditional mortgage, hence why I was leaning toward an FHA loan.

Where at on the west side?

Hello all!

I'm reviewing numbers on a potential deal in the Cleveland, Ohio market, and could use some help. The house is a HUD in University Heights, and was listed a couple days ago. I went through the property the second day it was listed, and was surprised about the condition of the house. With the exception of some electrical and plumbing (as listed on the property report), the house could be moved into. It has all brand new paint and carpet, as well as appliances. The plumbing seems to have been repaired in a handful of places (drywall was removed, and new copper fittings are in place). Roof, furnace, and A/C are all in good condition and reported to be functional. I've run some numbers for flipping it, and even acquiring it at the listed price, I should still be able to make a decent profit, approximately 20% of the ARV. An alternative to flipping, which would help me in a couple ways, is buying it as an owner occupant, living in it for 2 years, doing a slow flip, and doing the no capital gains tax strategy. I'm also trying to decide if I should do traditional mortgage on it, or an FHA loan. It is still is in the first 10-day period open to owner occupants/ teachers/ etc., which would give me an advantage before other investors can snatch it up, and it would be my first home I've ever purchased, if that counts for anything. So what I'm looking for from you, the greatest RE community, is some guidance on which strategy I should go with, and / or more details about HUD homes.

I'd love to connect with people who have:

• Gone through the process of buying a HUD home (so I could get a step-by-step)
• An agent that specializes in HUD homes (I've heard too many stories of unqualified agents dropping the ball)
• Experience in the University Heights market (I've been looking on the west side mostly)
• Experience with FHA / 203(k) loans (to go over finer details)

I would be extremely grateful if anyone could help at all. Feel free to comment, or send me a private message, and I'd be more than willing to share my numbers, and go over some other specifics. Only 7 days until bidding is open to investors!
Thank you in advance, Tom Kuhen
Key words : Ohio, Cleveland, Cuyahoga County, University Heights, 44118, HUD, FHA, 203(k) 203k,

I sent you a PM, but also for public knowledge:

Sam Strickler - Internachi certified housing inspector for single family, and multi-families (up to 4 units). Follow the link to get more information:

http://www.silverlininginspection.com/

Happy investing!

Tom Kuhen

I don't know him personally, but @James Wise seems to know the Cleveland market exceptionally well. He was interviewed on an episode of the BP podcast, and I always see him active on the forums. Between him and his team, hopefully you can find the help that you need.

Best of luck!

Thanks for the response Don Young ! I tried to look into more myself, but didn't have much luck. The state site doesn't get too specific as far as I've seen.