All Forum Posts by: Walter Key

Get your lender in place before you're putting in an offer. Check the list of Hard Money Lenders in the BP market place, get a pre-approval and proof of funds letter in place now, then get the next great deal lined up.

Holding costs. They'll be more than you think when you first start out. Utilities, taxes, insurance, etc. Utilities will likely run a little higher than you expect because the property is essentially an active work site for at least 8-10 hours a day, for 4-8 weeks straight or more. If you're financing the project in any way (traditional loan, hard money, etc) make sure you account for those holding coasts as well. 

Misc extra rehab items that you didn't think about. For example, let's say you have a pretty basic cosmetic rehab project. No major mechanicals to worry about. So you budget for carpet, wood flooring, maybe some updated countertops, some paint, etc. But, what about changing all the outlet and switch covers so they don't look like crap compared to the freshly painted walls? What about that crappy 20 year old light fixture that now looks horribly out of place next to the new flooring and countertops? Trim board that needs replacing because you really couldn't tell how beat up it was until it was right next to fresh wood flooring? 

Those are just a couple that come to mind off the top of my head. Having a really detailed rehab spreadsheet with all the possible items you could encounter in it will help with that. If you haven't already , grab J Scott's Book on Estimated Rehab Cost. He's got a great template to use when walking through homes and estimating rehab costs.

8 percent for vacancy(national average) unless you know the actual vacancy rate for your area (which you should definitely learn), 10 percent for maintenance and 10 percent for capital expenditures. It's really easy to get insurance quotes and past tax assessments so use the actual numbers there. 

For a quick snapshot ARV, I'll use Zillow and run the actual private comp analysis they offer. I'll look through all the images to compare condition and style then adjust the comps based on all the standard factors. When in doubt, I'll estimate downward slightly. I've had multiple occasions where I'll do this and my Realtor's comp analysis will come in right on or perhaps $5K higher than my own.

Scroll your mouse over the "Education" tab at the top of the screen. It's a treasure trove of knowledge and experience for you to learn from.

Welcome! FL is a great market. Best of luck to you.

I'd do the home inspection first so you can get a really good picture of what really needs to be done, then contact the contractor to schedule a walk-thorough and estimate.

I'm not sure I completely understand what you're describing. You have a Realtor that won't show you financials on a property until you show them proof of funds?

I won't address your second question because I'm not familiar enough with the Austin, TX market to give you an accurate opinion. As for your first question, you will not be "ahead" on payments and if you stop making the minimum mortgage payment you will immediately be behind on your payments. I highly recommend you take some of that $3,000 and stash it into a savings account until you have enough to cover 3-6 months of payments (in case the property does go vacant). Once you've done that, by all means pay double on your current mortgage note. You'll pay it down faster and build up equity faster. A 30 year fixed mortgage is still a good idea because if you ever need to stop paying double on your mortgage, or you get tight on money for some reason, having the lower payment of a 30 year fixed will give you wiggle room. However, 30 year vs 15 year is something you should determine for yourself after considering all your options and goals.

Awesome!