First flip and out of money. Can anyone provide insight

Rehabbing & House Flipping
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First flip and out of money. Can anyone provide insight

Shelby LeBlanc
Flipper/Rehabber · Houston, TX · Member since 2020 · 88 posts · 59 votes
I have a flip almost finished. I am out of money. Can anyone assist me with what are my options now? My last post with more details was removed for being an ad, which was not my intent. Just looking for advise or some direction from anyone who has been in this situation.
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Matthew CrivelliBusiness Member
Lender · MA · Member since 2021 · 1k+ posts · 1k+ votes
4y

If you don't have someone willing to bail you out it's time to cut your losses. Sell as is and try to recoup what you can. If you're in debt to the max borrowing more money will only make it worse. Even if you got the 15k to finish, what happens if it takes six months to sell? It sucks when things go wrong but you need to pull yourself together and figure out your exit strategy before you get foreclosed on.  

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  • Matthew CrivelliBusiness Member
    Lender · MA · Member since 2021 · 1k+ posts · 1k+ votes
    4y

    If you don't have someone willing to bail you out it's time to cut your losses. Sell as is and try to recoup what you can. If you're in debt to the max borrowing more money will only make it worse. Even if you got the 15k to finish, what happens if it takes six months to sell? It sucks when things go wrong but you need to pull yourself together and figure out your exit strategy before you get foreclosed on.  

    [email protected]413-348-8346
    Freedom Capital Funding, LLC523 Reviews
    WebsiteView Page
    13Reply
  • Tanner Sherman
    Real Estate Broker · Omaha, NE · Member since 2020 · 329 posts · 203 votes
    4y

    Shelby,

    Have you considered raising the capital in exchange for a fixed rate of return or equity? First you should look to see how much of the deal you would be able to give away in order for it to still make sense.

    For example: 

    Fixed rate- borrow 20k at 8-10% monthly payments until initial investment is returned or a higher rate such as 15% on the back end when you sell (you can get creative in how you pay them their interest) 

    Equity- if you have 80k invested you will give them 20% equity in the deal for 20k. They share the upside and the downside. 

    The other option is getting a line of credit from a bank, or tapping into the equity on your house to get the deal done. 

    There are plenty of ways to make this deal work, and "If you really want to do something, you'll find a way. If not, you'll find an excuse." -Jim Rohn.

    8Reply
  • Bruce WoodruffPro Member
    Contractor/Investor/Consultant · San Diego / Phoenix · Member since 2021 · 12k+ posts · 15k+ votes
    4y

    a) How much work is left? What exactly is it? b) How much of it are you able to do yourself?

    Since you are almost finished, I can assume that there are the usual end-of-project items? Flooring, Tile, Paint, Finish electrical or plumbing?  You can do the first few yourself in a pinch.

    Any place to get a short-term loan? If not friends or family, you might have to resort to your bank (Heloc of sorts) or even get a pink slip loan.  We've all been there, I even had to sell my favorite vehicle one time.....I just rode a bike everywhere til I could get another one.

    You have to get 'er done now, and get it making money for you......





    6Reply
  • Will BarnardPro Member
    Moderator
    Developer · Santa Clarita, CA · Member since 2008 · 15k+ posts · 10k+ votes
    4y

    If you post the details of the financial situation like how much work is remaining, what the sold price expectation is, how much you have into the deal so far, what your current loans are, etc. we can better answer your question. It rarely makes financial sense to sell before completion as you lose most or all of your previous efforts so completing it should be your goal unless you will be putting in more to lose more in which case, cut your losses now.

    Borrowing from friend/family, borrow from private investor, line of credit, HELOC, sell any asset you have, credit cards, terms with suppliers and service providers to be paid once it sells, etc. can all be means to get you to completion. Perhaps asking your current creditor for an additional sum to be released upon completion of each task needed.

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  • Shelby LeBlanc
    OP
    Flipper/Rehabber · Houston, TX · Member since 2020 · 88 posts · 59 votes
    4y

    @Matthew Crivelli Who would I sell it to now? I would be happy to sell it to a flipper who can finish it. I'm not going to get foreclosed on as I am only 5 days late on the payment at this point, but I hate being late on any payment. 

    2Reply
  • Shelby LeBlanc
    OP
    Flipper/Rehabber · Houston, TX · Member since 2020 · 88 posts · 59 votes
    4y

    @Bruce 

    @Bruce Woodruff Countertops and small touch up stuff. Floors are in and paint is done, trim is done. All electrical is done and plumbing is done. literally have at most 2 weeks worth of work to do. I am rolling coins to pay the contractors. Material is all bought. Other than counters & blinds, all material is bought. Thanks for your insight! Appreciate your time!

    3Reply
  • Matt Devincenzo
    Investor · Clairemont, CA · Member since 2011 · 3k+ posts · 2k+ votes
    4y

    See if you have any contacts in your area that flip. If the deal is actually good, then offer a payout to someone if they'll get you funded through completion. If you need 10K to finish and make loan payments through closing (or 5K or 3K) then see if they'll fund and you will pay double their money when it closes. At least that way you finish and can move on to the next one. 

    4Reply
  • Shelby LeBlanc
    OP
    Flipper/Rehabber · Houston, TX · Member since 2020 · 88 posts · 59 votes
    4y

    @Will Barnard I posted the details earlier the post was removed. I will try here. I have less than $10k to be 100% complete. Listing price will be $230K. I am $130K in it. I owe $26K on it. I'm going to take a few things to the pawn shop! I've been putting materials on CC to be able to pay the contractors. I'm willing to do whatever I can to get it finished. My payment is 5 days late, as I don't have the payment. I hate being late on anything! Man, I am stressing out!

    Thanks so much for your input! Greatly appreciated!

    4Reply
  • Shelby LeBlanc
    OP
    Flipper/Rehabber · Houston, TX · Member since 2020 · 88 posts · 59 votes
    4y

    @Matt Devincenzo Thank You! My wheels are turning! I know I can get it done for $10K (materials, labor & current payments). The area is hot and it will sell. There are several rehabs in the area and nothing on the market. This is Houston near the medical center. Thanks so much for your kindness and insight! I'm on it!

    3Reply
  • Bruce WoodruffPro Member
    Contractor/Investor/Consultant · San Diego / Phoenix · Member since 2021 · 12k+ posts · 15k+ votes
    4y

    @Shelby LeBlanc Can you do any of this work yourself?

    3Reply
  • Kunal Mishra
    Flipper/Rehabber · Jersey City, NJ · Member since 2016 · 158 posts · 86 votes
    4y

    @Shelby LeBlanc

    You are in the renovation phase.

    If yes, then try using a Homedepot credit card for the purchase if materials.

    If there is an option of HELOC on any of your properties use that

    Or refinance any of them.

    Or partner with a contractor where he gets 1.5 to 2 times the labor cost after you sell it.

    Now I don't know how much that hurts you in your profit so ignore the last option right away if it doesn't make any sense.

    But you can pay for labor using some CC.

    5Reply
  • Lonzo Seebe
    Member since 2021 · 6 posts · 3 votes
    4y

    List it now at $230k and see what happens? Someone may bite

    3Reply
  • Michael Gessner
    Pomona, NY · Member since 2016 · 375 posts · 217 votes
    4y

    @Shelby LeBlanc I would list it now as a coming soon, if all you have is touch up and counters then your just about finished. Or list it live on the market and allow the buyers to choose counters. Also you could reach out to your counter top supplier and ask them to put the install on credit and they can file a mechanics lean as collateral, and they will then be paid at closing. Sounds like you only have a few grand to go so you do have options, its nit like you need to come across 10s of thousands. Best of luck

    7Reply
  • Matt M.
    Specialist · Easton, PA · Member since 2018 · 1k+ posts · 2k+ votes
    4y

    @Shelby LeBlanc

    Shelby, totally wish I could help. If I was in your area we’d get it done!

    What about a personal loan from your bank or one of these online personal loan companies?

    3Reply
  • Bruce WoodruffPro Member
    Contractor/Investor/Consultant · San Diego / Phoenix · Member since 2021 · 12k+ posts · 15k+ votes
    4y
    Originally posted by @Matt M.:

    @Shelby LeBlanc

    Shelby, totally wish I could help. If I was in your area we’d get it done!

    What about a personal loan from your bank or one of these online personal loan companies?

    Yessir...if I were within an hour or so, I'd drive there and meet Matt. You'd have a killer house!

    4Reply
  • Matt M.
    Specialist · Easton, PA · Member since 2018 · 1k+ posts · 2k+ votes
    4y

    @Bruce Woodruff

    My ProMaster is loaded up! I’m hitting the road, I’ll meet you for breakfast 

    3Reply
  • Bruce WoodruffPro Member
    Contractor/Investor/Consultant · San Diego / Phoenix · Member since 2021 · 12k+ posts · 15k+ votes
    4y

    I'll bring the beer.....

    3Reply
  • Shelby LeBlanc
    OP
    Flipper/Rehabber · Houston, TX · Member since 2020 · 88 posts · 59 votes
    4y

    @Bruce Woodruff I work at the house everyday.

    1Reply
  • Shelby LeBlanc
    OP
    Flipper/Rehabber · Houston, TX · Member since 2020 · 88 posts · 59 votes
    4y

    @Lonzo Seebe I'm going to do this! This is what I've been thinking, too. Thank you!

    0Reply
  • Shelby LeBlanc
    OP
    Flipper/Rehabber · Houston, TX · Member since 2020 · 88 posts · 59 votes
    4y

    @Michael Gessner Like your thinking! Thank you!

    0Reply
  • Shelby LeBlanc
    OP
    Flipper/Rehabber · Houston, TX · Member since 2020 · 88 posts · 59 votes
    4y

    @Matt M. This means the world to me! Thank you!! Your insight is very helpful!

    0Reply
  • Shelby LeBlanc
    OP
    Flipper/Rehabber · Houston, TX · Member since 2020 · 88 posts · 59 votes
    4y

    @Bruce Woodruff I'm very emotional right now & y'all are making me cry with your generosity! I've been ripped off by a contractor (& he & his men tried to gang rape me at the house) is why I'm in this bind. Prior, I was in real good shape! Thank you for your kindness! You are golden!

    0Reply
  • Wesley I.
    Investor · San Diego, CA · Member since 2019 · 286 posts · 135 votes
    4y

    @Shelby LeBlanc

    0% interest credit card loans and or personal loans. If most of the things you need are materials, a HD or Lowes might help even more.

    5Reply
  • Natalie Schanne
    Real Estate Agent · Princeton, NJ · Member since 2016 · 1k+ posts · 1k+ votes
    4y

    @Shelby LeBlanc - I’m sorry to hear you’re in this pickle. I would find and reach out to a) my local reia and find out if there’s a newbie flipper who wants to help in exchange for some experience and equity, b) reach out to a new or experienced real estate agent who would loan money plus get the listing.

    See what if anything you can get done on credit such that you can pay them at closing, like a credit with the granite countertop people or flooring installation company. I would also offer signs in my yard or maybe logos at the flip during showings

    I hope hope hope that the work done has been acceptable quality. I’ve definitely been to “done” or 95% done flips that felt shoddy.

    If all else fails, if you’re into it for $150-160 and it’s worth $230k, you should be able to find a flipper who will take it off your hands for cash for about what you’re into it for.

    If you’re in the position where someone can get a mortgage on it, then I would try to list it on mls now before it’s finished and ask for someone to help me finish it while it’s under contract because payday would seem close at hand.

    Check out Debbie Deberry and the FlipHers Facebook for free female specific advice. You may find a private lender

    4Reply
  • Larisa Dalekorey
    Pueblo West, CO · Member since 2021 · 11 posts · 11 votes
    4y

    @Shelby LeBlanc why put in blinds when you could just go a cheaper route of putting in curtains appealing to the eye. And instead of putting in expensive counters (or is it counter tops) you can measure it yourself and put in lole a butcher block counter tops. How much is the property worth now? How much are you going to give it up for? How much are the monthly payments on the mortgage?

    3Reply
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