All Forum Posts by: Wendy Owens

Up until now we have always lived in a home for two years as we renovated it and then sold it. We have done three this way but are now in a home we really prefer to stay in. We were looking for our first rental, which our broker said she was more than happy to help us finance when we stumbled across an affordable and quick flip. The purchase price is $110k and the reno budget with a buffer is 25k. The total time investment would be 6 weeks before we can list it at a list price of $170k based on comps. We estimated a 20k profit after all costs. Not huge gains but seemed like an easy no brainer. We called our broker who said if we sold it in less than 6 months they were not interested in financing despite us putting 20% down and paying cash for all the renovations. This got us looking into hard money loans but how do you know who is reputable and what are good terms and what we should run from.

A little about us, my husband and I have run a tech company for 10 years now that develops software. We have 3 additional employees and are still growing a little every year. We can show a steady income and a long history of it so self-employment doesn't seem to be a huge issue for us when qualifying. We have cash to put into the deal. We have excellent credit. What we don't have is experience in short term flips and we haven't gotten a rental yet so no experience there.

Is hard money the best way to go with flips? The margins aren't huge on this house so wondering if it's best to just let this one go. Our broker suggested we buy and hold the property for a year but if we were to buy a property with the purpose of renting we could acquire them in a different neighborhood for 75-100k that needs less renovation but earn similar rent values. Any input or advice would be appreciated.

I think there is some confusion and I wasn't clear when I explained our situation. My husband and I do not have W2 jobs. We have been self-employed for ten years and run a business that has employees. We're hoping our client keeps our employees on after we exit and that will keep some income flowing but we need to budget for worst case scenario. Our gut says they will keep things as is, but of course one never knows.

Also, after college, I was a mortgage underwriter all the way up until my husband and I started our tech company ten years ago. It's been very helpful for us as far as understanding financing rules. I think that's probably part of why I have convinced myself we need so much cash.

We have also been discussing flying back to Cincinnati every quarter for a few weeks to acquire a rental over the next year. This way we have 4 rentals already seasoned before we ever step away from security.

We flipped the houses in Cincinnati in 2014, 2017, and just before we moved in 2018. We took the approach of living in the home while we renovated it over 6 months to a year in our spare time. This, of course, would not be how we approach it if it were our business.

The reason we plan to pay cash for rentals is in an effort to be competitive in the market. Our goal is to acquire our rentals well under market value. There are a considerable number of investors in the Cincy area and to ensure we get the best deals cash seems to be king. We have talked to other investors in the Cincinnati market that said they are able to get properties at about 60% or less of the market value by paying cash.

As far as salary we are used to living on around 200k so the 120k would be a cut from what we are used to. We have three kids and the area we would move back to in Cincinnati has high property taxes and higher home values but it's the schools our kids grew up in so it's where we would return to. I doubt we could dip much lower than that salary so our hope was one-year reserves would create the safety net we need but we also don't want to be overly cautious.

To the question of can we find enough flips, based on what we have been finding online in our research if we include the surrounding suburbs we should find more than enough.

We have been looking at properties here in Portland and are considering doing a flip if we find the right deal. We will be here for at least one year to fulfill our contract with our client which should be plenty of time to fit a flip in.

We don't mind risk at all. We have started and sold other businesses and we crossed the country to come out here for our tech business. Our biggest issue is we don't want to leap from a business we know inside and out to one we have only dabbled in, before we know we have set ourselves up for success. That being said we also want to build into something that will create passive income for when we are older. We also really enjoyed flipping the previous houses and want a business our kids can be part of when they get older if they so choose.

My gut says we would be good on the 400k and the 675k number is just my own fears and doubts creeping in. 

My husband and I recently relocated to Portland Oregon for a contract our tech company won. We moved from Cincinnati where we flipped 3 properties on the side and we made about $30k on average after expenses on each property. The buy in here in Portland is so much higher our long term goal is to return to Cincinnati and start a full time flipping and rental business. We have never been landlords but feel like it's the right move for retirement investing.

Here is my question... Our tech company is doing very well but it's just not where our passion is. We know we want to be doing real estate full time. We need $120k in personal living expenses a year in Ohio for our family. Our goal is to flip 6 homes or more a year to achieve that salary. We also want to invest in rentals by purchasing the first 5 in cash and when they are seasoned we pull the money and purchase 5 more. We are trying to figure out when do we have enough cash to make the leap and exit our tech business. We were thinking the following but wanted to get opinions of seasoned experts.

1 year salary reserves: $120k

Cash on hand to flip 2 properties at a time (goal being 6 total for year) 

$115k buy in on property and 35k in renovations = $150k x 2 = 300k

Pay cash for 3 rentals to start with $70k per rental, 15k to fix up rental = 85k x 3 = 255k

(after rentals season for 6 months pull cash out to purchase 2-3 more)

Total cash needed to start full time: $675k

Based on the timeline we hoped for we will be closer to 400k and were trying to figure out if we would be okay to take the leap or wait it out until we actually meet our numbers. I'd love to hear some opinions. Thanks so much!

My husband and I recently relocated to Portland Oregon for a contract our tech company won. We moved from Cincinnati where we flipped 3 properties on the side and we made about $30k on average after expenses on each property. The buy in here in Portland is so much higher our long term goal is to return to Cincinnati and start a full time flipping and rental business. We have never been landlords but feel like it's the right move for retirement investing.

Here is my question... Our tech company is doing very well but it's just not where our passion is. We know we want to be doing real estate full time. We need $120k in personal living expenses a year in Ohio for our family. Our goal is to flip 6 homes or more a year to achieve that salary. We also want to invest in rentals by purchasing the first 5 in cash and when they are seasoned we pull the money and purchase 5 more. We are trying to figure out when do we have enough cash to make the leap and exit our tech business. We were thinking the following but wanted to get opinions of seasoned experts.

1 year salary reserves: $120k

Cash on hand to flip 2 properties at a time (goal being 6 total for year) 

$115k buy in on property and 35k in renovations = $150k x 2 = 300k

Pay cash for 3 rentals to start with $70k per rental, 15k to fix up rental = 85k x 3 = 255k

(after rentals season for 6 months pull cash out to purchase 2-3 more)

Total cash needed to start full time: $675k

Based on the timeline we hoped for we will be closer to 400k and were trying to figure out if we would be okay to take the leap or wait it out until we actually meet our numbers. I'd love to hear some opinions. Thanks so much!