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All Forum Posts by: Timothy J.

Timothy J. has started 7 posts and replied 30 times.

Post: Flip #1 - 4/1 SFR in Blackwood, NJ

Timothy J.Posted
  • Secaucus, NJ
  • Posts 32
  • Votes 7

This flip is our first official one. We are going to close tomorrow. Here are the details.

Address: XXXX Elmwood Ave, Blackwood, NJ 08012

Description: 4 Bed, 1 Bath, 1382 Square Feet SFR.

Purchase Price: $60K

Repair Budget: $28K

After Repair Appraised Value (Professionally Appraised): $167K

We are using a hard money lender for 100% purchase and 100% construction funding. We are paying upfront points, 1 month prepaid interest, along with title & underwriting fees, etc. The total amount of upfront fees amount to around $10K that we are providing at closing. We are also fronting the cost of materials which will get reimbursed during the first inspection before the draw payment is issued.

We are using a local contractor to the area for the actual work. My business partner is managing the design / rehab. I was responsible for offer / acquisition on this one.

Here is a pic of the exterior:

Here is a pic of the interior:

The general plan is to fix up the kitchen, baths, re-tile, add vinyl siding, give it a new roof, basic drywall, etc. The entire project is expected to take around 3 weeks, give or take.

Post: Down-to-Earth Explanation of Fannie Mae Deed Restrictions

Timothy J.Posted
  • Secaucus, NJ
  • Posts 32
  • Votes 7

@MaxKim - our rehab will most likely be larger than a small one - most likely it could run up to $30 - $40K (which is about what our offer was accepted for). How can a deed restriction possibly tie up a rehab loan from a hard money lender?

Post: Down-to-Earth Explanation of Fannie Mae Deed Restrictions

Timothy J.Posted
  • Secaucus, NJ
  • Posts 32
  • Votes 7

I'm trying to understand whether we are able to obtain rehab funding for a Fannie Mae offer that was accepted. There is a Deed Restriction of 3 Months (the 90-Day Rule) that limits the Sales Price for 3 Months to not more than 120% of the Purchase Price, but I'm wondering about the line:

"Grantee Shall Also Be Prohibited From Encumbering Subject Property With a Security Interest in the Principal Amount of Greater than $43,200 for a Period of 3 Months."

Does this mean if we purchase it we can't rehab it via a Rehab loan? Not sure how to interpret this..

Thanks @Shvonne C. 

 Well said!

I have a wholesale property under contract but am having some issues when describing the property to prospective buyer.

For instance, since I am assigning it, yet am listed as the buyer who has the option to assign, should I just leave out the fact that it is a 'Wholesale Property' and just say I am selling it? What language should I be using?

Some prospective buyers, when asking about the property, don't want to proceed dealing with a 'Wholesaler'. They want to only deal with the end Seller.

Post: Buying from a wholesaler as opposed to buying from the source

Timothy J.Posted
  • Secaucus, NJ
  • Posts 32
  • Votes 7

I cold call to grow my buyers list. Many of the potential buyers I deal with are either:

1) Not so smart that they would or could do what I am doing on their own. Some are immigrants, their families own a property, they are looking for others but don't have the wherewithall to do research, comps, etc.

2) Focused on managing their current portfolio and do not have the time to find the properties.

Even if they could find the same property on their own I supply them with:

  • Comps
  • Photos
  • Repair Estimates (if available)

And all of the finds aren't available on MLS and are also at least 70% ARV, so they are getting great stuff IMO.

I have a question about wholesale arrangements. I have been starting out with fix/flips (foreclosures / short sales) and am starting to branch out into wholesaling. I have a seller interested in signing an agreement with me to wholesale her property and am wondering how to market the said property to my buyers. The two options I am considering:

1. Bake the assignment fee into the price I advertise the house for (e.g. I have a contract to Buy or Assign a house for $100,000. I then market the house for $110,000 to my buyers. They never know that I have a $10,000 assignment fee until closing).

2. Market the house for $100,000 to my buyers list along with a $10,000 assignment fee. The buyers understand that they are buying the place for $100,000 along with the assignment fee I am charging. There are no surprises, although certainly the buyers could attempt to circumvent or negotiate my assignment fee down once they are aware of it.

Does anyone have any experience / opinions with either option? Are there others I should consider?

Post: Should I Make An Offer Based on This Info (New Jersey)?

Timothy J.Posted
  • Secaucus, NJ
  • Posts 32
  • Votes 7

@Ibrahim Hughes @Ana Nomys 

Right, the home is not currently condemend. Would we obtain this temp CO immediately after the offer but before attorney review? 

This is something I could call the township about immediately after the offer is accepted but before papers are signed since we can always back out of the deal if nothing is signed.

Thanks for your help.

Post: Should I Make An Offer Based on This Info (New Jersey)?

Timothy J.Posted
  • Secaucus, NJ
  • Posts 32
  • Votes 7

First time posting in this section. 

There is a Fannie Mae HomePath Property home (foreclosed) that my business partner and I are interested in making an offer on. We will use hard money for the loan (the interest and points are fine for us), but I'm concerned about a few things:

1. The back of the home has a hole in the wall and one of the structural beams has been impacted - it appears as if it has suffered some light damage, although nothing major. The township says that before the home was bank owned it wasn't condemned.

2. It has an open sewer permit and the township requires the septic to be 'closed or abandoned' since it is now hooked up to a public sewer line.

My question is: since the township can condemn a home after it becomes owner-owned, is it worth investing in? The structural beam concerns me although my contractor claims that it can be fixed and shouldn't be an issue. If we buy it to rehab and flip and the township condemns it we're out of luck. How horrible does a house have to be before it can be condemned?

Post: Newbie Start Up REI Company in Northern NJ

Timothy J.Posted
  • Secaucus, NJ
  • Posts 32
  • Votes 7

Thanks @Dave Visaya , @Mark Langdon , @Brandon Turner , @Kurt Naletko , @Annette Hibbler  and @Dmitriy Fomichenko . This site has already proved to be a great resource as we scale up @Hauns Peter .