We got our first deal in Contract!

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We got our first deal in Contract!

Matthew Hernandez
Dallas Tx · Member since 2018 · 7 posts · 4 votes

Hey Everyone! My name is Matt Hernandez, and my younger brother (Caleb) and I just got into a contract with a house in Arkansas. We are a bit nervous, but I am tired of all this analysis paralysis crap. Below you will find the details of the house, and if you have any suggestions please let us know:

House Location- Benton, AR; Bedrooms and Baths- 3/1 and a half; Sqft- 1456; ARV-125k; Contract Buy- 50k; & Repairs- 20k.

We are a bit of a pickle, because we found out that our HM lender won't lend out of the Dallas-Ft Worth area. If you know anyone that lends in Arkansas or want to partner in with us, please let me know. We are going to go through the list of HM folks today and tomorrow, so hopefully we can solidify the finance soon. We plan to flip this house. 

We got this deal through a personal contact who has a relationship with the owner. We were being creative with the deal, and we offered to pack and move them to their new destination (DFW). Thank you for your time and wish us luck!

- Matt Hernandez

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Michael Ward
Real Estate Broker · Fayetteville, AR · Member since 2018 · 75 posts · 50 votes
7y

@Matthew Hernandez buy the house with a construction loan, interest only for 12 months, then sell before the 12 month term is up. I’m in northwest Arkansas and just did that with Simmons Bank. Simmons is pretty hungry for construction loans it seems. I paid 6% interest and 1 point in closing fees. And, bonus, you develop a relationship with a commercial lender. PM me for more info, and we can plan on a phone call if you like.

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  • Cody Wilkinson
    Real Estate Agent · Des Moines, IA · Member since 2017 · 23 posts · 5 votes
    7y

    Hey Matthew,

    I don't have direct answer to your problem. I assume this is your first deal? Have you considered selling the contract to a local investor and working with them on the deal? It would put a lot of your nerves at ease knowing that someone who is experienced is confirming your thoughts on the deal and then helping you execute it. Also, while your working with them I'm sure you will pick up a lot of contacts for lenders, GCs, agents, ect.

    Obviously you will lose a large portion of the pie, but you will gain knowledge that will aid you for the rest of your life if you plan to make this a your source of income. One deal won't change your life anyways so knowledge so the knowledge if worth more then you'll ever make on 1 deal.

    Just a creative way to get more out of the situation if you can't get the financing aspect figured out.

    1Reply
  • Matthew Hernandez
    OP
    Dallas Tx · Member since 2018 · 7 posts · 4 votes
    7y
    Originally posted by @Cody Wilkinson:

    Hey Matthew,

    I don't have direct answer to your problem. I assume this is your first deal? Have you considered selling the contract to a local investor and working with them on the deal? It would put a lot of your nerves at ease knowing that someone who is experienced is confirming your thoughts on the deal and then helping you execute it. Also, while your working with them I'm sure you will pick up a lot of contacts for lenders, GCs, agents, ect.

    Obviously you will lose a large portion of the pie, but you will gain knowledge that will aid you for the rest of your life if you plan to make this a your source of income. One deal won't change your life anyways so knowledge so the knowledge if worth more then you'll ever make on 1 deal.

    Just a creative way to get more out of the situation if you can't get the financing aspect figured out.

    Cody, Thanks for the input. You're exactly right, if we can't solve the financing aspect of this deal, I would probably reach out to a local investor and wholesale it to them. Hopefully, that is not the case, but a deal is a deal. There is still plenty of other ways to be creative and financing this contract. My brother is a general contract, and we both like the do it yourself approach, so ideally we will do most of the work ourselves. 

    1Reply
  • Cody Wilkinson
    Real Estate Agent · Des Moines, IA · Member since 2017 · 23 posts · 5 votes
    7y

    @Matthew Hernandez Sounds like you have a good base when I comes to the repairs which is where most of the issues will arise. I'm sure if you get out there the money will be easy to find if you have a great deal. Good Luck!

    1Reply
  • Ehsan Rishat
    Specialist · Carlsbad, CA · Member since 2018 · 1k+ posts · 638 votes
    7y

    @Matthew Hernandez This looks like a great deal, so, I feel like you will have investors flocking to you in no time. 

    Great Job and Good Luck!

    1Reply
  • Shannon McLeod
    Des Moines, IA · Member since 2019 · 19 posts · 14 votes
    7y

    @Matthew Hernandez Are you into wholesaling with your real estate investing, or are you looking to flip this house? It kinds of sounds like you are trying to wholesale it? 

    0Reply
  • Matthew Hernandez
    OP
    Dallas Tx · Member since 2018 · 7 posts · 4 votes
    7y

    @Shannon McLeod we plan to flip this house unless we can’t secure the finance. We both love to work on house projects, so it would super fun to do what we think is needed for this house.

    However, ultimately if we can’t get the money to complete the deal than I guess we have no choice, but to wholesale.

    0Reply
  • Matthew Hernandez
    OP
    Dallas Tx · Member since 2018 · 7 posts · 4 votes
    7y

    @Ehsan Rishat thank you for the motivation!

    0Reply
  • Michael Ward
    Real Estate Broker · Fayetteville, AR · Member since 2018 · 75 posts · 50 votes
    7y

    @Matthew Hernandez buy the house with a construction loan, interest only for 12 months, then sell before the 12 month term is up. I’m in northwest Arkansas and just did that with Simmons Bank. Simmons is pretty hungry for construction loans it seems. I paid 6% interest and 1 point in closing fees. And, bonus, you develop a relationship with a commercial lender. PM me for more info, and we can plan on a phone call if you like.

    2Reply
  • Marlina EckelPro Member
    Rental Property Investor · Cotati, CA · Member since 2017 · 52 posts · 21 votes
    7y

    Good luck with this deal. I would  think that you could find the money, if contract time allows. 

    0Reply
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