First Flip - HUD property under agreement

1 Reply

Hey guys! I've been busy the last couple months, and finally got all my ducks in a row. Getting my LLC set, and particularly getting financials in order took longer than I wanted, but it has been constant progression.

Here's the quick, down and dirty back story: I bought my primary residence (first property) in August 2014. I bought it for 89K, 20K in renovations, and now it is appraised at 180K. After everything was completed I got a HELOC, set up my LLC and bank accounts. I networked with many people and found some hard money lenders that I was ready to work with. After this I was all set and ready to get to work.

After that I had a few deals fall through, got outbid on a few properties, etc. I found a property on the MLS in my area and jumped on it. The property is a HUD home, which is a twin in a nice neighborhood not far from my home. Some details:

Purchase: $45,000

Rehab: $40,000 (This includes 15% unexpected cost)

ARV: $150,000

Annual Taxes: $4,000

Rehab is scheduled to be 8 weeks, which includes kitchen, bathroom, add powder room, build deck, finish basement, refinish floors, paint, landscaping and a few other items. What I love is it is essentially the same thing I did in my house just a few months ago, and virtually the same layout too. 

Now the best part...after I got it under agreement I put together a really nice packet to send to my hard money guys, some banks, and some potential private money lenders. I'm THRILLED that I got hooked up with a lender that is financing 75% of the total cost (acquisition + rehab) at 5.25%, and 1 point. NETWORKING PAYS OFF! This alone saved me thousands.

I have a home inspection set up for the end of the week and settlement is scheduled for April 17th. 

I left out many details to try to not bore you guys to death, your time is valuable! Please let me know if there is anything in particular I should look out for or expect with a HUD home or any other concerns.

Cheers

How did you find the hard money lender?

Thanks, wish you the best

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