All Forum Posts by: Tamara Taylor

@Alice K. Thanks for posting the Flintstone's house. I would feel better about living there than the psycho house in Connecticut.

@Danielle J. The best part of listening to the BP podcast is learning from others' mistakes or troubles. I am happy to share :) I couldn't have done it without BP. It keeps me motivated. Good luck on your endeavors!

This listing left me speechless. It has to be the oddest house I've ever seen. Even the price history is a hoot. I had to share. If anyone has seen something weirder, please post pictures.

Happy Monday all!

http://www.zillow.com/homes/for_sale/24-Brentwood-...

Hello all, 

Here is the happy ending to my story. Long story short: The project was completed beautifully with the new contractor. The bank needed a "change order" to switch out funds to cover something else. I got the contingency. The guy who inspected the property took a few pictures asked minimal questions and left. My check arrived a few days later via Fed Ex. 

As you can see from the before, during, and after photos, it was an ugly task. Well worth all the headaches. I plan to stay in the house for another year to avoid capital gains taxes when I sell. This will also give me a chance to finish a few little projects and I'll get my real estate license too. I can't wait to do it all over again :)

@David Moore I don't plan to get lawyers involved. (ain't nobody got time for that) If the bank wants to pursue the issue then that's up to them. Unfortunately, this friendship has not survived. He's the kind of person who blames everyone else for his problems instead of learning from mistakes. I'm ok with that. I have plenty of other friends who are supportive and helpful.

Thank you all for your encouragement. I have no doubt that I'll finish this project and move on to the next project with a little more wisdom. I'm pretty tenacious and resilient. To answer a few questions...

My original contractor was licensed and insured. I hired him because he was a friend from church and he seemed really knowledgeable and eager to work on my house. I naively thought that I could trust him more than a stranger. Before closing on the house, I explained to him in person and in emails the stipulations of the 203k loan but apparently "forgot" all about that. I unfortunately do not have any receipts from him. I've asked him for an invoice listing all of his expenses and have not received it yet. I've kept all of my own receipts which add up to my half of the draw.

Like I said, the new contractor is 203k certified and he's been really helpful. He went through the original scope and came up with a new quote for all the work. Even with the contingency I'll be $3000 over budget. I know that doesn't seem like much in the grand scheme of things but there were a lot of expenses that I have already paid for out of pocket that were not in the original scope. (kitchen cabinets, appliances & tools) This was all planned for and there should have been plenty left over to cover unexpected costs. I hadn't planned for the contractor to abscond with his half of the draw. I'm just happy that I was smart enough to keep half of the original draw or I'd really be up a creek.

I did get an extension from the bank. It's just the budget I'm concerned about. I guess I just need to talk to the bank and see what I can work out.

I'll keep you all posted.

-Tamara

Hello everyone,

I was very happy to buy my first REO at the end of 2015. The plan was to rehab the house, live in it for a while, sell in 1 - 2 years, make a profit and buy another investment property.

Mistake #1 - I hired a friend as my contractor for my 203k project. I had to fire him 5 months in because there was no way he would have completed the job by the deadline. I had given him $7500 (about 1/2 of the initial draw the bank gave me) to buy supplies. If he spent $1500 on materials I'd be surprised. Now I've hired a new contractor (203k certified) and with the money I have left, including the contingency, which I doubt the bank will give me, I am about $3000 over budget. 

Mistake #2 - I didn't get all the facts about a 203k loan beforehand. Apparently, all of the items listed on the original scope of work need to be done and nothing can change without some authorization from the bank. My question is, What happens if they aren't all done? Example: On the original scope, the fence in the back yard was to be removed and replaced with a new fence. I can't afford to have the new fence built ($1600). Will the bank withhold all of the money for the project or just the amount the $1600 for the fence?

I hope this make sense to someone and I appreciate any words of wisdom.

Thanks,

Tamara

Hello Wilfredo, 

I'm surprised no one has answered this question for you. Yes, you start paying right away. When you close on the house, both the mortgage and 203k loan payments will be rolled into one payment. 

Make sure you hire a 203k certified contractor or check that the licensed contractor has done at least a couple 203k projects. It's a complicated process and I myself and in the middle of mess because my original contractor was clueless. I had to fire him and hire an actual 203k certified guy. 

It's hard to find solid answers to 203k questions. Here's a link that might help you.

http://www.amerifirst.com/amerifirst-blog/bid/3976...

Best regards,

Tamara

@Kris McGinty Yes, you would have to live in the house and own it for a year if you got the FHA loan and 203k loan. For me it's worth it because it gets me out of my crummy apartment. But because there are time limits with the 203k loan, all of the work will be done by the time I move in. I'll be able to enjoy the fruits of my labor for a few months before I sell.

Keep us posted on what  you end up doing.

@Kris McGinty If you get an FHA loan then you only need 3.5% down. I borrowed some from my 401k and then got an additional $30k with the 203k loan. If you don't have a 401k account then consider private or hard money. I would only suggest this if you are confident that you can flip the house in about 3 months. Good luck!