Residential Real Estate Agent · Maple Grove, MN · Member since 2012 · 6 posts · 0 votes
Hello BP flippers and rehabbers,
I am trying to work out some details for my grand entrance into becoming a flipper.
Here is my tenative strategy:
Buy a distressed REO. -In Twin cities Minnesota, 4bd 2ba.
Use a FHA 203(k) loan. -This is a 3.5% down payment with up to 35k additional for home repairs, appliances, small remodeling, etc...
- I will be occupying the home as a primary residence.
Conduct rehab with contractors. -Cosmetic flip mainly to include bathroom/kitchen remodel.
Have house reappraised by bank. -I would assume it would be about the same ARV as other comparable properties in the area. Correct?
Refinance to pull "improved" equity out of property. -I know my payments will increase so I plan on saving a portion to pay back the difference in increased mortgage/PITI payments.
Use equity as down payment on next flip. - Buy another REO to flip in the area.
I would appreciate any professional advice. Thanks in advance.
Residential Real Estate Broker · La Crosse, WI · Member since 2013 · 360 posts · 110 votes
13y
Just like in many areas, it is getting harder to find "distressed" REO's in the Cities. When I worked in the Twin Cities, there were many foreclosures for the investor to choose from. Now, my realtor friend who works with investors says the banks are doing the work of the flippers more often than not, and pricing them close to or at retail, so it's getting harder to find homes to work on.