Real Estate Investor · Lafayette, CA · Member since 2010 · 179 posts · 71 votes
13y
Originally posted by Bill W.:
Nice one. Can you discuss how you'll be financing a project that big?
Sure,
What i do is i get hard money for the 1st trust deed. Very typical rates run 8 to 10 percent plus a couple of points. I say 8 to 10, because i use several lenders and depending on how hungry they are one will usually come down a percentage or two. The down comes from private financing or from personal funds. If i use personal funds. I will usually take out a private second to put my capital back in the bank. 3 reasons.
1) when you are going in all cash or private financing on an REO or Short, the banks want Proof of Funds, having money in your bank helps. Lets then know, you can close
2)As much as i can, i use OPM , better cash on cash return, possible infinite return (no money in the deal)
3) I sleep better when my money is in the bank, not in my projects
Hope this helps, let me know if you have anymore questions. I'm here to help.
PS any lenders out there with better rates PM me, still time to compete and i like new relationships
Investor · Sarasota, FL · Member since 2008 · 17k+ posts · 17k+ votes
13y
Congrats Michael!
Does the high price tag come from the area or the type of house? In other words, is it a small house in a really desirable area or is it a monster house? Or a combination?
Real Estate Investor · Lafayette, CA · Member since 2010 · 179 posts · 71 votes
13y
J Scott, this is an interesting deal. I would say more like a combination. A little foundation issues, original house in best country club neighborhood. Needs complete remodel. Head to toe. Might need to add some extra footage for the right feel on the master bedroom/bath combo. Kitchen needs new layout with open floor plan instead of being all closed in. Grandma's House in Best Location. Comps are at $600 a sqft on new/rehabs. You Get the idea. I will take pictures for progress.
Ben Leybovich, My Brotha, this is SFR Flip. No need to reposition here. Just fix and flip. ... im still thinking about moving in? (500K exclusion) Wife hates that part. Good problem to have. 2 years seems like such a long time to wait.
$373K, not to shabby.
It's all just talk till the check is in the bank. Keep you posted.