All Forum Posts by: Xavier Mc holder

@Shawn Washington Thanks for the feedback. Was this the strategy you used when you first began investing? I ask because i live in an area i believe is similar to Philly with lost of distressed  properties. 

Good Afternoon everyone,

I would like to pick the minds of the many investors on BP as to why an investor might find more reward in purchasing distressed properties like the many that can be found in Philadelphia “philly”, Baltimore or Newark as opposed to a foreclosed property or one that would need little to no repairs?

My thoughts are that because of the low purchase price investors are enticed. I have seen REO properties in these areas for as little as $16,000 but, the repairs needed to bring the property up to par to either hold the property for cash flow or sale is extensive. Have any of you done or went through this on your first investment? Would you recommend this to others as a first investment? What was your experience?

Good Morning everyone and welcome to BP Marc.

@John Hickey have invested  in the newburgh area and if so what has been your experience? Do you invest in this area for the appreciation or cash flow? could you advise on any good areas to invest in?

Thank you everyone, I appreciate all the feedback and knowledge everyone has bought to the thread.

@Jay Hinrichs Thank you for taking the time to respond, I am a new investor and seeking knowledge. I am currently attempting to figure out what strategy would be best for a new investor with little cash reserves to get started in the industry. If i were to utilize the BRRRR strategy utilizing funds from are you saying that they wouldn't cover everything listed above? from you experience if i were to seek 130,000 assuming that the lender would cover

• Purchase price of the property: $100,000
• Construction cost to renovated it: $30,000

how much of my personal cash should I be prepare have into the deal? As a beginner is their another strategy you would suggest?

@Christopher Phillips thanks for taking the time to respond. I have read various articles stating that are purchase price should be between 70-75% of the ARV so that when utilizing the BRRR strategy you are able to pull out all of your initial investment out at the time of refinancing. this article suggest 65% that is why the number was skewed to 130,000.

• Purchase price of the property: $100,000
• Construction cost to renovated it: $30,000

in your experience will the hard money lender lend the  amount of $165,100 to cover everything listed above ?

A Blog on BP gave the following example:

The after repaired value (ARV) of a potential property is $200,000 and you can purchase it for $100,000 and it needs $30,000 in repair costs. In addition you have to consider the following

$6,500 in closing transaction costs (state/county transfer/recordation tax, title insurance, title work, property insurance, taxes.. etc..(~5%)

$5,200 in lender fees, (~4%)

$7,800 for lender interest payments assuming a 6 month outstanding loan (~6%)

$2,600 in holding costs like electric, gas and water. (~2%)

All of these costs come to a total of $152,100 (including your purchase and rehab costs).

• Your costs will be about $13,000 for realtor fees (5%) and transfer taxes/title costs (1.5%).

My question is, Would the hard money lender lend the all in amount of $165,100 or would they only cover the Total purchase price and construction costs: which amount to $130,000? And do I need to have 13,000 cash reserved or can this come out of the 34,900 profit I would have? 

@Antoine Martel Thank you very much for you response. What I'm having an issue comprehending is when doing a BRRR deal the funding could possibly be coming from a private money lender who will be financing the purchase, how do you account for the holding cost in the 6 month time frame? At this time you will be doing repairs and have no tenants on the property to produce cash flow. Do you wait until you have enough cash reserves to jump into these type of deals?

Good evening, I recently attended a 3-day seminar on real estate investing and the strategy they suggested we utilize to get started was not wholesaling as I have heard many other times but by Flipping foreclosures, would any of you suggest the same for an individual with little cash reserved? and if not what would you suggest?

Steve Kontos Good morning steve thanks so much for taking the time out to respond to me it is greatly appreciated. I recently attended a 3 day seminar on real estate in the city and the strategy they suggested we utilize to get started was to flip foreclosures, in your opinion is this a viable way for an individual with little cash reserves to get started and if not what would you suggest ?