All Forum Posts by: Tamara Elliott-Deering

Hi,

My name is Tamara and I'm addicted to real estate - oops, wrong forum. I am a real estate investor, realtor and general contractor based just outside of Austin, TX.  I have been investing in real estate for the last 8 years and have completed 10 projects. I am what someone else on the site referred to as a slow flipper, I take on the worst of the worst houses for the sheer entertainment of it. I joined Bigger Pockets when I first started investing then drifted off but this is by far the best community of investors out there so I'm glad to be back.

I am currently looking for my next fix and flip deal and hope to be more disciplined than I was in the past in my processes and cash handling. My long term goal is to own rental property. 

In addition to flipping properties, I have a real estate license and have been looking at non-traditional ways to use my license to benefit other investors and I believe I have come up with a way to do that. 

I look forward to meeting many of you through the forums, and blog posts.

Tamara

I would calculate the holding costs just to see but I would use a method of calculation like the BRRR (Buy, Rehab, Rent, Repeat) method, the income would be the market rent that you are avoiding by living in the property. Any buy and hold calculator should help you.

This is a great strategy and is the one I planned on using until life intervened. I would recommend using a standard flipping calculator, I have one that I use that I would be happy to send you if you don't have one you like. Your interest rate will be considerably lower than using hard money or private money so make sure you take that into account.

Look for properties that are 80 - 90 percent of market, this margin is too thin for flippers to make any money and the houses will need more work than the average retail buyer would be interested in so you will be facing less competition. 

Consider 203K financing, you can get a great rate and the down payment is quite low. Also, you can have the repairs completed before you move in. If the repairs are strictly cosmetic and less than $30k you can do a 203K streamline loan, spend the money on things like kitchens and baths and focus on transitional design that will stand the test of time. You can finish the curb appeal projects over time and you will be in great shape when it is time to sell.

Tom,

You've received a lot of advice and I'm kind of hesitant to throw into the mix, but what the heck. First of all you have a lot going for you, your family is a wealth of information and I'm sure they love to give advice. Second, you have enough money to make the down payment that most banks will require for you to purchase an investment property. Third you know the area.

So here's my advice, 1. get yourself qualified for a loan asap. Many mortgage brokers will be able to tell you what you'll qualify for based on the assumptions you give them on net income and your windfall. 2. Whatever property you buy make sure you're willing to live in it if the proverbial sh*! hits the fan. I'm a big believer in contingency planning. 3. Consider using part of your windfall on a SFR that you are going to live in, preferably the worst house in the best neighborhood, fix it up while you live there, sell it when the market appreciates and take your gains up to 250K if you're single tax free if you hold the house for 2 years.

Best of luck.

Tamara

How much work are you planning to do yourself? If you are planning to hire a GC to do the work for you see if they're willing to come out and give you an estimate for what they think the house is going to require, then add a contingency and see if your numbers still make sense. Some common sense guidelines, do you see evidence of water damage or fire? Are you planning on replacing all of the sheet rock anyway? If so, I would take the risk. If your numbers are so tight you're worried about it, it's probably not the best deal for you and you should walk away, a $500 loss is a lot less than a $50K loss.

Tamara

I'm a Realtor as well and I hate it when another Realtor won't get back to me. I usually have that problem on REO properties or foreclosed properties when the property has gone into multiple offers and the agent doesn't care enough to let you know. I wish there was a status for that in MLS because the properties show as active when really there not. It doesn't make the buyers real happy either.

Tamara

I started my LLC before I bought my first property just to give myself a layer of protection against personal liability. However, make sure you get good advice about how to operate your LLC, you want to make sure that you run it like a company or it can be pierced in a lawsuit.

I like Will am not an attorney so take my advice with a grain of salt.