All Forum Posts by: Jessica Martin

Thank you for the response. I'm definitely putting my full attention to this. My husband works and I stay at home so this will be my "job". I'm working on things from the time I get up till I go to bed. There is a lot to learn and I'm excited to learn it. I can already tell this is not easy and the competition for deals is crazy, but Im committed 100% and other investors seem to be very willing to work with us, surprisingly. My biggest fear in all of this is accidentally doing something illegal. There seems to be a lot of fine lines to walk when you don't have a real estate license. Trying to figure out LLC and how that works to get a company name going. Again, I really appreciate the response! Have a great evening.

So my husband and I are just getting started in REI. Our initial goal was to fix and flip and long term it still is. I have good credit, but my husband, not so much. He's got the income and I'm a stay at home mom who was looking for something that I would enjoy doing and could make more than just $10/Hr... because after daycare and gas expenses, it's pretty much not worth the time away from my kids and doesn't even come close to equally contributing to my husbands income as an Industrial Electrician. A few problems we've run into so far are the fact that our dept to income ratios are a little too high right now and he's got the income with bad credit and I've got the good credit with no income which = No Gap funding... We have a private investor, but that's a no go without the gap funding... So we've decided to start smaller. So far I think we've done well with networking. We actually had found our first deal but since we couldn't get the funding for ourselves, we started looking at other options. I know wholesaling is an option, but I'm not sure how to do the paperwork and do it legally in the state of Texas and from what I've heard, Texas is picky on the forms used. So we got in contact with someone who is willing to pay an assignment fee of $500 for the deal, assuming he is able to find another buyer to wholesale too. This investor already has a buyers list though so he should have a lot more success at finding a buyer than we would. I also figured we could learn from him in this process, how to do wholesaling and the paperwork. Also, these investors seem to willingly give info on the "hot areas" and other useful information when you mention "bird dogging" to them so seems like a win-win situation? So this investor has sent the contract over. However, I thought that assigning contracts in Texas was not allowed anymore without showing proof of funds to be able to purchase the deal myself before being able to "flip" to the next buyer? Or am I misunderstand the circumstances in which this is allowed or not and how its done? Just wanting to get some opinions on what we are thinking of doing? Is this fair for all or are we missing a better option? I'm very excited about this business, but I'm trying my best to learn from others mistakes instead of my own... any advice for beginners is welcome. Thanks so much...

Thank you for the replies everyone. 

Jon: I did estimate bills on the high end. With the construction going on I wasn't sure how much electric tools and things would pull. If I had to take a more realistic guess, I would assume $200-300... I'm just afraid to underestimate something and not have enough cash stuck back to fund everything during the process. That's why I asked if maybe I'm over evaluating things though. $500 is an upfront fee with many fending as a "processing fee" or things like that. I also saw quiet a few that required an inspection and/or appraisal to get a loan... So I was factoring in some of those misc cost and requirements from lenders. I don't really have any money to start so my plan is to take out a personal loan as the "gap" money and roll profits till eventually I wont have to do that. The lenders I'm taking to will only fund about 80% of the cost of home purchase and reno. So I would have to take out a decent sized personal loan to cover everything else, which would require a monthly payment and interest on that loan.. Its looking very expensive to have two loans out on deal, but its really my only option at this point.

Hi everyone. I'm very new to real estate investing. Actually working on finding my first deal. I generally stay on the side of caution when it comes to evaluating anything, but I'm wondering if I'm over evaluating at this point. I've kind of come up with a formula to try and go by, but a deal I thought was good, after I ran all the numbers, doesn't seem so great, but I'm not sure how a .60 on the $1 isn't a great deal after the math is done. So here's what I have. 

The deal I'm looking at is a 2B/2B, 1088 sqft. Its current assessed value is 59k as a 2B/1B... the second bath is not currently permitted. Contractor said it shouldn't be a problem. The owner was asking 43k but we got him to settle on $38,700. He pays closing and back taxes due. ARV is estimated from $79k(worst case)-$89k...

This is the formula I came up with. Please let me know if I'm missing anything..

        ARV (79,900)

• -Purchase price ($38,700)
• -Acquisition cost (Earnest ($500), Inspection($500?), lender points(4=$2148. Includes rehab $)/fees($500)
• -Rehab cost (15k)
• -Carrying cost (6 months)(Utilities(450/month), monthly payments($626/month. 14% interest rate), insurance($75/month?), gap lender payments($500/month?)
• -Selling cost (6% for Agent, 4% for Title/escrow/home warranty/closing cost/termite)(10% total) ($7,990 total)
• = Profit ($4,656)

This is based off of having the loans and property for 6 months from bought to sold. I do my math with ARV as worse case ARV in case I get my first house doesn't sell as fast as I hope. Some things like Inspection and insurance and gap lender payments are pure guesses as I've never done any of those things so not sure of the cost yet. $4,656 profit just doesn't seem like a good ROI when you think of all the risks or a problem that requires more $$$ or I may have forgot about something in the initial equation. It seemed like a good deal at first. Ive heard the general rule is ARV - 70% - cost of repairs = offer. If this was the case the offer would be $40,930, but our agreement is even better than that and still the profit margin just doesn't seem good enough? I don't know. Any input from experienced investors is welcomed. Thank you