Houston Flip - Regular Updates from Start to Finish
I am closing on my 5th house, which is my 7th deal, on October 17th and my plan is to renovation and sell it. I'm buying it from another investor who started writing about it in his BP blog but I won't share those details until it's officially in my possession.
A year ago at this time I only had 2 houses and 1 deal. I don't count my primary residence as a deal despite house hacking it. A lot has happened in a year and I've had a major setback as described below. I'm still relativity new to real estate but I have built a strong foundation thanks to BP. I've done a little of several things and I'm still I'm trying to figure out where my time should be spent to get the most out of it.
I have several reasons for writing a public diary like this.
1. To keep me accountable because I want to be able to go back and see what went well and what didn't. I want to be able to state specific goals/desires at moments in time and see if they're met.
2. To be a learning experience for other new investors for things I do well and things I screw up.
3. To serve as a forum for advise and help if/when I'm stuck or not sure what to do.
I've attempted one renovation before and that was a disaster. I worked with a partner 50:50 who had much more experience but multiple contractor issues, health issues to my partner, and high crime in the area lead to most of my capital being tied up for 9 months with no profit to speak of. I did learn a lot about what not to do, so maybe I'll be better off going forward. I'm definitely coming into this flip much more prepared than last time. I may post that story if I get some interest.
This time around I'm using a local bank as my lender instead of doing all cash. They lend 80% of the (purchase price + reno cost), or 75% LTV of ARV, whichever is lower. At only 1PT, and 6% interest it's a great resource for cheap money. The downside is they need 4 weeks to close like a traditional bank so the seller needs a flexible closing date.
I'll post pictures, show the numbers, and provide much more information as things get going. I don't want to be too premature since I don't own the house yet. I'm hoping to finalize my contractor's bid proposal this weekend so we cant start on Tuesday.