New to BP - First investment property flip

5 Replies

Hi All, 

I've been reading a lot on here... lots of knowledge and valuable resources. I'm a new investor and about to launch an LLC with a partner in the Philly area. My question is - Should I look for just a good deal on the market or attempt to focus in on short sales/foreclosures? We would be financing with 20-25% dp. Any insight is greatly appreciated.

Originally posted by @Keith Rorer :

Hi All, 

I've been reading a lot on here... lots of knowledge and valuable resources. I'm a new investor and about to launch an LLC with a partner in the Philly area. My question is - Should I look for just a good deal on the market or attempt to focus in on short sales/foreclosures? We would be financing with 20-25% dp. Any insight is greatly appreciated.

If your LLC doesn't have any cash or credit you may have a hard time getting a loan, even 75% LTV. You'll at least have to personally guarantee the loan, meaning you need enough credit and income and good DTI ratio to cover the loan.

Hi Troy... appreciate the response. I think that the route I will have to go is the "personal guarantee" as you mention above, given the funds available right now and being a new LLC. I am still in corporate America with a F/T job and my personal credit is in excellent standing. I've read that small local banks/credit unions are better options. I see that you are in the area... if you have any recommendations for local financing options in and around Philly, I would be much appreciative. Thnx in advance if you are able.

@Keith Rorer You asked if you should look for deals on the market or focus on short sales/foreclosures. Either one works. I think it depends on which aligns with your goals and your style of investing. Short sales are slower to close than a traditional purchase on the MLS. However you may get a better deal from a distressed seller. It may take a little longer.

If your ultimate challenge is lead generation there are a lot of resources here. I would also suggest listening to BP Podcast 141 with Chad Carson.

Ultimately there are so many ways to find deals in real estate so I suggest a couple of things. You can determine your niche before you start investing. Or if you just don't know but open to all types of strategies, you can let the market determine your strategy. I was in the latter category so one piece of advice I got was invest in the types of properties my lender is willing to fund.

Originally posted by @Keith Rorer :

Hi All, 

I've been reading a lot on here... lots of knowledge and valuable resources. I'm a new investor and about to launch an LLC with a partner in the Philly area. My question is - Should I look for just a good deal on the market or attempt to focus in on short sales/foreclosures? We would be financing with 20-25% dp. Any insight is greatly appreciated.

 Keith,

Congrats on starting your process here on BP.

Short sales are sometimes on the market with realtors anyway, and some banks require you to list the property even if you do find it before it is on market.

But in either case, one thing thst may help your chances is a faster source of financing. Traditional financing with 20% down is slow compared with your own cash from a line of credit, from a private lender, or from hard money. The best deals often require moving fast, and waiting for final approvals, appraisals, etc can hurt you.

Best of luck!

Chad