All Forum Posts by: Brad Noe

Hey @James McCormick!

We are blessed with some GREAT investor-friendly lenders in our market here. 

Hard Money - SurePoint Equity, MM Lending, Annex Capital and Flippin' Loans are ALL locally owned and operated and great to work with. 

Local Community Banks - River City, Republic, and United Citizens are all great.

I have worked with each one of these lenders in some capacity and would recommend you check some or all of them out. Let me know if you have any questions!!

@Alex Olson thanks!! Yes, we are closing on another fix & flip in East Louisville next week hopefully. We usually have 3-4 projects going at a time, but with the uncertain times we are in we will likely limit it to just 1-2 at a time for the foreseeable future.

Investment Info:

Single-family residence fix & flip investment in Louisville.

Purchase price: $80,000
Cash invested: $100,000
Sale price: $250,000

Contributors:
Katie Noe

We lovingly called this house the "Woodpecker House" due to its *awful* wood siding. It was truly a hot mess when we bought it, and definitely the largest project we have ever tackled. We endured many trials and tribulations throughout the entire process, and it truly was a labor of love for us for many months as we continually had to maintain our resolve and power through each obstacle as it came to us.

What made you interested in investing in this type of deal?

It was in a great area on the east end of Louisville, Kentucky. Deals like this do not come along too often in this area, so we were quick to jump on it.

How did you find this deal and how did you negotiate it?

The seller contacted us directly. It was a woman, her partner, her son, and her mother living in the home, which had been in the family for over 30 years. They did not have the means to pay contractors to make repairs to the house, so it had been slowly deteriorating and was to the point where it was now a safety hazard for them.

How did you finance this deal?

We used a local hard money lender. Required a 10% down payment, and 10% interest with no actual payments due until month 7.

How did you add value to the deal?

The sellers desperately wanted out of the house but there were two problems: they needed the money from the sale of the house in order to purchase their next home, and THEN they needed to rent for approx. 6 months to build up their credit scores in order to secure financing for their next home as well. That is where I was able to step in and offer a solutions that other investors had not been able to: I had a brand new rental property just down the road that they could move into.

What was the outcome?

There were many "surprises" throughout the project that caused us to have to pivot and make adjustments to our plan, the largest of which was discovering major water damage caused by a fire that the sellers had conveniently neglected to tell us about. The ensuing repairs increased the budget by roughly $12,000!!! Additionally, we decided to throw an additional $20,000 onto the budget in order to reconfigure the hall bath into a master bath, and add a second bath off the kitchen.

Lessons learned? Challenges?

We had lots of issues with our contractor. The project was supposed to take 2-3 months and ended up lasting over 6 as the contractor continually dragged their feet and made excuses. It's extremely important to have a mutual agreement in contract form with the contractor prior to starting the work, which lays out the scope of work, timeline, and other expectations from both sides in great detail. We had an agreement but it was not nearly detailed or explicit enough, and that caused issues.

@Tim Bergstrom you correctly pointed out some of the hotter areas of town. My wife @Katie Noe and I flip houses and also do some long term rentals here in Louisville and in Southern Indiana. For flips, we try to stay in the $130-200k ARV range. For rentals, we are looking for a good balance of mild cashflow and appreciation in B and C class neighborhoods.

In general, in Louisville we like to operate inside of interstate 265 and east of I-65. In southern Indiana (which we are mostly targeting for rentals) we like New Albany and Jeffersonville, although Charlestown is also booming right now.

Come join the party in Louisville! 

@Rudy Manna I'm in Louisville only about an hour and a half drive from Cincinnati. I haven't expanded there yet but I keep a pretty close eye on the market. I know a good wholesaler up there, if you'd like I could send you his info.

@Joel Kleyer thanks man! I was being too lenient on him, he had done several jobs for us before and if I would have been paying more attention I would have seen the signs that something was going on with him. Hindsight is 20/20 of course. And while it is necessary at times to give General Contractors a little money upfront, in this case I overdid it and will never do that again. It's the old adage of Trust But Verify. I trusted what he was telling me was completed without verifying it, and got stuck holding the bag for it. Luckily there ended up being enough margin in the deal that it turned out OK in the end and we all still made some good money. But I was extremely stressed there for a while!

Buy a used car with a lot of miles on it that you can afford to pay cash for. I bought a 2005 Acura MDX with 160,000 miles for $4,000 earlier this year and love it.

Investment Info:

Single-family residence fix & flip investment in Louisville.

Purchase price: $76,000
Cash invested: $32,000
Sale price: $146,000

Contributors:
Christopher Vincent, Katie Noe

This deal in the Pleasure Ridge Park area ended up being one of the most challenging projects we have ever done, for several different reasons. From a disappearing contractor, to surprise structural issues, to nit-picky inspections (who demands a second handrail on a little 3-riser backdoor step?? Sheesh.), we were tested with this one for sure.

How did you find this deal and how did you negotiate it?

This lead came through direct mail advertising. Our acquisitions manager Chris handled the initial contact and walk through with the owner. Their mother had passed away and her brother had been living in the house without paying rent, although the mother left him no ownership interest in the estate.

How did you finance this deal?

We used a local hard money lender (SurePoint Equity) to fund the purchase + rehab, and we enlisted the help of some friends to make the 10% down payment.

How did you add value to the deal?

We repaired the roof, installed brand new flooring throughout, completely remodeled the bathroom, painted the walls and cabinetry, installed new doors and door hardware throughout, and spruced up the landscaping.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

As always, my Realtor and wife Katie Noe (Keller Williams Louisville) did a phenomenal job from start to finish. She makes most of the design choices, stages the property, and of course markets it on the MLS for sale. Once again her hard work paid off for us as we landed an over-asking price offer within 24 hours of listing!

@Chris Gordon awesome man, welcome. Come check out a KREIA meeting in Louisville (Kentuckiana Real Estate Investors Assn.), great group there. Lots of opportunities in Louisville and southern Indiana for flipping and cash flow investing.