Part 1
Hey BP Community,
I wanted to take some time and share this project that literally would not have happened without Bigger Pockets. Thank you again @Joshua Dorkin for taking the risk to start this. Many of you have shared your stories and it's so encouraging, so keep it up!
What we were (and are) looking for
Flips and Buy & Holds. This was prior to me getting my RE license, and I connected with an investor/agent here on BP, shout out to @Erin Legler. She helped us find this deal (as well as several others).
The Deal
We walked into this flea ridden mess of a house, and smelled the potential immediately. It was listed at $87.5k , and there were comps in the neighborhood just under $200k. The listing had it as a 2/2 with 1300 SQ FT, but in reality, it was a 3/2, with a potential for a 4th bedroom with closer to 1500 SQ FT. After some quick math, we knew this was a great deal and proceeded to put in a cash offer. Erin connected with the listing agent and found out there were multiple offers the first day, so we decided to come in at $5k over asking at $92.5K.
*Key Learning Most BP'ers, and especially those in the Orlando & Central Florida area would agree that good deals are getting pretty scarce on the MLS. Of the three deals I've closed off the MLS to date, we have come in at or over asking price. It’s easy to get caught in up in getting an “amazing deal” on the front end, but with the amount of competition there is, it’s been well worth it to come in higher. Knowing my numbers: comps and rehab/holding costs has allowed me to do this with confidence.*
Acceptance to Close
Needless to say, they accepted our offer and we were thrilled. I've connected with several great hard money lenders, both through BP and my local REIA, but I wanted to see if I could raise private money for this purchase. As @Brandon Turner has said, REI is "sexy" and people are interested so I put together this presentation:
http://www.biggerpockets.com/forums/517/topics/176471-seeking-flip-funding-in-orlando-50-ltv-and-138-roi
In addition to the BP community, I shared it with family, friends and local investors that had expressed interest in what I was doing. I got some really great feedback about the presentation and the deal, and received a lot of interest and queries.
I was hoping this would be a stress free transaction, but as with so many deals, it came right down to the wire.
A private investor from BP reached out to me a few days before close, and expressed interest. We were supposed to close on a Friday, and after he did some due diligence, committed to the deal on Thursday afternoon. He was planning to lend out of his IRA and needed a notarized mortgage and promissory note by the end of the day in order to send wire instructions to his IRA trustee. I scrambled to put these together, call a notary friend and got them signed, notarized, scanned and sent back to him within a couple hours. We were both doubtful that all the pieces would fall into place with the looming deadline, but somehow they did! The wire instructions were sent Friday morning, but the money didn't make it in that day, so we spent a weekend wondering if it would close… Monday morning came, the money was there, and the deal closed!
... Stay tuned for part 2 tomorrow
