New to Real estate in Indiana
Hello, as the title says I am new to this real estate thing. Sort of... Im 35, live in our second home. Wife works corporate job, I'm self employed with a new business. Think our goals are to move out of Indiana at some point. The way we currently are going I don't see that happening unless I hit the lottery, which I don't play.
Now on that sort of part. I'll spell out the first house I "flipped". 2012, 1500sqft ranch near me came up, it was trashed, foreclosure. It was listed, I met the realtor there, crawled all over the house(Been around construction my whole life), no inspection, it had good bones and a good foundation but needed stripped to the studs. Asking $64k for it. I offered $30K, and put a portfolio together with all that was wrong with it structurally. (sagging floors, mold in the crawl, busted out window, roof ect). The bank didn't even counter me. Waited 3 weeks and they dropped it to $60K, I offered $30,001. We went back and forth, purchased for $48K. I cashed in a retirement I had(Im dumb) though didn't take a big hit because it went toward my first home.
The first remodel got stripped to the studs. Took out some walls, leveled floor and 3 new 60' long beams in the crawl, added master suite, still keeping it 3br 2 ba. Roof, electrical, plumbing, hvac, everything new. Did everything but the drywall myself. All in I had about $90K in the house including the purchase. I borrowed money from family for the refurb, after complete I pulled a heloc and paid them back, then got to paying down the line of credit.
I learned a lot doing the first house, best lesson was I spent too much on the kitchen and master bath and made it nicer than the neighborhood. Only thing that was too nice was the master bath, tile, big walk in, soaker tub. Kitchen cabinets were custom, $6k, should have used store bought cabinets but oh well. Also learned some things I need to hire out. Like tile. I sold all my tile tools as soon as I got done with them.
I never quit looking at real estate listings. We moved into the house, didn't like neighborhood life but we had a nice house, and did owe a lot on it. Took us till 2017 to find the next house.
We wanted to get out of town. Looked at a lot of houses, I just didn't want to have big mortgage. House popped up on Zillow, drove there that day, 2200sqft cabin style home on a basement, on 6 acres. (Standard framing, cedar siding) unfinished basement, was listed as 2br 2 ba. Online auction. Did some research on it. Been empty since 2014, built in 2007. It was rough, but not as bad as the first house. Didn't have a garage but I can build one of those.
Waited till auction day, top dollar was 135k for me. I didn't even have financing approved but what the heck I'll figure it out right?! I was doing some mortgage research. We had 60k available in the heloc on the current home. I ran across a 203k loan, and a motivated realtor wanting me to use it. Auction went up to 178K. I stopped at 135. Bummer. Fast forward 2 weeks and it's up again for auction. Guess the first person couldn't get financing. Ended up getting it for 132k. 203K loan was not what I thought it would be. Day after auction ended someone broke the glass out of 3 of the patio doors so add that to the repairs. Turns out you have to use approved contractors to do the work on the house to do the 203K work. Long story short, 11 months after the auction ended, I had a 160k Mortgage, and the keys to a house I can't live in. The contractor they used was horrible. I tore out everything he did. Had to reset all 4 doors, it was awful. Took me 8 months but I built a 3 car garage, finished the house, remodeling it all, moved a wall or two and finished out basement. We moved in, and listed the first house. We had $90k in the first house. I listed it myself on Zillow, had a call from a realtor the same day who had a buyer interested. Showed the house, they wanted it. $153k was the price we settled on. I paid the other realtor 2% to do all the paperwork, they paid for everything.
Unfortunately I borrowed against that house to build the garage and remodel our current home but we got a small check at closing.
Current home I am into for a total of $210k. Most recent appraisal was $305k. Owe $155k! Only debt we have.
Thats my real estate history. I still look at listings daily. Ive been leaned on my family and friends that I should try this flipping thing. My second remodel I found ways to save some money in places where I splurged on the first house. Ive thought about it for a while. My current job isn't taking off like I hoped but I am making some money, just only busy 20hr a week or so. I feel like ill have time to do a lot of the work on a flip myself, though I think if I got a few under my belt id make connections with contractors and sub out some or all of the work.
I got a guy that knows some people flipping houses around here now. He does 6-8 a year. Been pulling info from him slowly. Seems like he is mostly buying at Sheriff sales. Ive not attend one yet but plan to in January to at least see the process. In reading, it sound like there are things to look out for, a title search would be mandatory. Also hard to get into the houses and see them.
Another possibility would be estate auctions. I have went to 2 recently where the houses sold for peanuts (5k on the first and $2500 for a house and 10 acres at the last), no one bid on them so they went real low. Both in repairable condition for sure. So I see that being an avenue I could look for houses too. Ive yet to contact any realtors with my plans, though I think I need to establish a relationship.
I think after the first of the year we are going get a heloc on our home for whatever we can get, figure I can get 80k safely. I feel like that would be a good place for me to start. At least have the money available so when a deal comes along I am ready to jump. I am motivated, recently cleaned up my diet and feel a lot better, much more motivation.
Nice wealth of information here. Ive done some looking around and plan to do more.