New member. 1st flip buy closing Wednesday

8 Replies

Hey everyone. Just started on my first flip, under contract to close on Wednesday. Purchased 110k, 30k repairs, 190arv. We are changing up the floor plan to open concept and really putting this house back to top of market at that price. Avg DOM in area for flips has been less than 30 days and ARV is right in the sweet spot where I have room to drop if I have to or I can try to set the market a little higher if I want. With all costs considered I should have worst case 20k net or best case around 35k. We will see how it goes.

I'm really excited about this process and I am very lucky that I found an experienced rehabber and gc right off the bat that was happy to lend his advice and experience as well as the ill team he already has in place. Since all the money is in the buy though I am still looking for more wholesalers to work with to meet the demand I expect to have in the next few months. I'm planning to go all in with investing for flips and rentals and will be looking to turn around a lot of properties. If you are a wholesaler or hard money lender in the DFW market looking for new clients please reach out to me!

So first deal officially closed today. Things to remember.

1. The cash the lender requests you to bring to the table is not cash toward closing :-). Rookie mistake. Luckily it doesn't affect me too bad and it's not a difference in my profit numbers. Just my cash flow.

2. Well there is no number 2. I had everything else figured already! Go me!

Next steps:
Start looking for additional lenders that will require less out of pocket toward the equity so I can have more available for EMD, rehab cash flow and for the EMD on my next deal.
Getting work started on the house! Foundation and demo start tomorrow!

As my credit situation is not the greatest I have had to track down asset based hard money lenders to find my deals.  My current lender wanted at least 10% of purchase/rehab from me to start the deal.

Purchase was 110k

ARV is 185k

Rehab 32k

I had 5k EMD and 10k at closing plus my closing costs

12 month term, 13% with 4 month pre pay penalty and 3 points on the front.  

Arv is conservative with worst case being 180k.  I am expecting to be able to list 195-199k with what we put into it and the DOM is sub 30 days in the area.  I expect to be out of the property in no more than 90 days with absolute worst case scenario net profit coming in at 20k if everything goes wrong on the rehab.   I'm looking forward to this.  

So first deal officially closed today. Things to remember.

1. The cash the lender requests you to bring to the table is not cash toward closing :-). Rookie mistake. Luckily it doesn't affect me too bad and it's not a difference in my profit numbers. Just my cash flow.

2. Well there is no number 2. I had everything else figured already! Go me!

Next steps:
Start looking for additional lenders that will require less out of pocket toward the equity so I can have more available for EMD, rehab cash flow and for the EMD on my next deal.
Getting work started on the house! Foundation and demo start tomorrow!