All Forum Posts by: N/A N/A

Adrian,
You are acually right we are only pre-qualified, but our credit report has been run and all he needs to pre-approve us is proof of income (last two pay stubs) so hopefully nothing will change between now and when he gets those from us.

Any ideas on some f the other questions I posed, such as when we need to make an offer in regards to the inspection. Do we need to make the offer prior to getting pre-approved, or get pre-approved for a set amount and then make an offer lower than that (sorry, I am pretty inexperienced)?

Are capital gains taxes avoidable if the proceeds are reinvested with-in a certain time period?

Anyone know any good hardmoney lenders in the KC area that would be willing to point me in the right direction to getting funded for the rehab of this home?

thanks again to anyone who want to put their 2 or even 3 cents in.

Thanks for the input dcg123, I really appreciate the help

I have talked with our lender and he says that he can get us 100% financing with 0 money down, pending any ridiculous debt or horrible credit, which we both have neither. Since we have are planning on rehabbing and selling quickly, he said "no problem, we will just have to broker out the loan." Does this mean anything from my stand point other than probably not getting as good an interest rate?? Also we decided to bring in our realtor (since the owner was already using one) and we will use his inspector to do the inspection. Will we need to put an offer on the table prior to the inspection, or is it possible to have the inspection done before we make an offer?

As for the rehab money, we have been looking at hard money lenders. Is it common to pay multiple points (say 6 to 8) up front on top of the 14-18% they will be charging as interest? Our mortgage lender says that those are bad ideas for something so short term, but his option was getting a rehabilitation loan from them on top of the home loan. Only problem with that is that every single cent of the rehab has to be contracted out, and we were hoping to do the majority of the work ourselves. Keeping in mind that we are (if at all possible) trying to keep from asking my partners father for the money. Knowing he would benefit from it, I think he is ok with it, but it is more of a "I need to do this on my own" type of a thing for my friend.

last question being, if we do get this place and everything is a success, is there anyway of getting out of the capital gains tax? Any benefits to setting up some kind of corp this early (in what is hopefully a long career in this busines)?

thanks again to anyone who wants to throw out a little knowledge that I probably do not have.

It is a fix and sell, and yes it was the sellers agent, so I assumed she was doing just that. THe repairs would include paint inside and out, minor updates in kitchen/bathroom, and possibly refinishing the deck. There also is an unfinished basement and were thinking of finishing it for as little money as possible (some inexpensive carpet, and sheetrock), nothing too elaborate. If all else fails in getting a loan for the repairs, my partners father would be willing to act as an investor for the amount of the repairs, for a small fee.

let me know what I need to be thinking of in terms of laws, taxes, etc...
It sounds so cut and dry to buy a house fix it and sell it, but I know that is not the case. Also, what would you recommend in terms of what fix up options get the best return upon sell.

thank you for your help Ohio, and anyone else who wants to chime in I would greatly appreciate it, as I am trying not to be part of the statistic of those who lose on their first deal and then never try again.

Me and a friend (business partner hopefully), have found a house that is for sell in his neighborhood. It is the eyesore of the block and really need some cleaning up. The color of the house is horrid, but the siding is in good shape. The lot is very large and could be a very nice home to live in for a family. They are selling the property "as is" at a very discounted price, approximately $50,000 less than all the homes its size in the area are appraised for :D . We have a viewing coming up, and we have just been pre-approved for the amount they are asking for. Now what :oops: ...Do we try to negotiate the price down even further, or do we trust the realtor when she says that if we hesitate we will lose it. Do we also hurry and act on buying the house first before we have our finances in line for the rehab money. Let me know if you can think of anything that I will need to address before even thinking twice on this property. Any help that anyone can provide would be much appreciated.

Tyler

Ebersole, here is a link to one of the threads on this forum that I was just reading last night. It is really informative on the pro's & con's of getting your license for an investor. Sorry I don't have any original thoughts on the subject, but I am extremely new at this.

http://forums.biggerpockets.com/viewtopic.php?t=565

Tyler04

juzamjedi,

thanks for the response. I did some research and found out that this is not a forclosed on home or REO. It is a FSBO by a very motivated seller (sounds like they moved onto a new home to quickly and now are trying to get rid of it ASAP to avoid paying the two mortgages.) I also found that the house and all other houses in the area were appraised at a price much much higher than what was "suggested" on the auction. I also just found out we have a family friend who is a realtor up in this area and is more than willing to help out. My question is, what should I have him help out with/research/etc? Also do I need to have an inspector come to the house before I go to this auction or will the auction company have already done that? And what do I need to know about prepayment penalties and tax penalties for paying off the mortgage to quickly, is there any way to get out of these? thanks again and anyone feel free to chime in.

Judson,

thanks for the reply, I really appreciate your thoughts. You had mentioned I need to get a title search. What is the easiest way that you would recommend? Should I get on the counties web site, or do I need to go to one of the pay websites out there to get the info I need (which is what exactly??)?

Also, if it has gone into forclosure and is now a bank REO (am not sure if it is yet), does that wipe the title clean? I have read somewhere that it does, but I was not sure if that is true for every case, or even true at all. I also am fairly new to the area and do not know any "trusted" realtors that you had mentioned I should have check out the house and advise what they would list it for. Should I befriend one at a local REIC or trust one from a normal real estate company. Also how would I go about checking how much others in the neighborhood sold for short of knocking on doors?

Lastly (and I apologize for the lengthy post yet again, just trying to be as thorough as possible), would you recommend just cleaning up the place and doing minor repairs and updates, or going all out considering the prices of the other homes up for sell in the area. (ie. finishing basement, new fence, hardwoods, kitchen makeover). Please anyone chime in if you have any suggestions and don't be afraid to shoot my ideas down or anything like that, as that is what I am looking for.

thanks

Hi all, and thanks ahead of time for all your input/criticism!!!

I am a 25 year old working in Kansas City. Me and a friend (business partner hopefully) have been wanting to get into RE investing for a while and have been reading books (and this forum!!). We are wanting to do flipping rather than starting out with rentals (eventually), and have his father as a private investor if needed. We have stumbled across a property being sold at an auction, no min bid, by an auction & realty llc. The property is not kept up (very lacking in landscaping), and the house is extremely outdated. Built in 1955 and from the looks of it, the people must have wanted to live in a time capsule because everything is very 50's.
2 bedrooms, 2 full baths, 2 half baths, formal dining room very spacious kitchen (pink tile though), unfinished basement, ranch style on a 1 acre lot. Hardwoods covered up by horrid carpet. Auction LLC is "suggesting" a price of around 200,000 (probably because of all that need to be done to update)
however, it is in a very nice area, near a popular park. House down the street on same size lot, ranch (but has a nice pool and is very updated) is selling right now with an asking price or 579,000!!!

do we even stand a chance of getting out hands on this to rehab and sell, or would you even recommend this big of a job for our first time (keeping in mind I work for an investment bank and would be very diligent about calc'ing out the rehab costs and keeping to a sound business plan)

any help/criticism/opinions/etc. would be very much appreciated