All Forum Posts by: Chris Brown

@Harry Williams, I have been using the House Flipping Spreadsheet for a couple of years now. It was developed by another BP member. It has sheets to calculate purchase price, create budgets, estimate costs, track expenses, manage schedules forecasting, track profit and reporting. I have found I don't need anything else for what I am doing at this point. It is definitely worth a look. 

@Jackelyn Gonzalez, great point that I was not thinking about. I have actually done this before as well. Some lenders call it a bridge or cash out loan. You can take an interest only loan, usually up to 50%, of the current homes ARV that would be paid back once the 1st home closes.

The only issue with these, is they eat more cash in lenders fees and carrying costs, but definitely worth consideration if the deal is good enough. 

@J Scott's books are all great reads with loads if useful and insightful info. I have been using the House Flipping Spreadsheet (google it) and it is a really great, relatively simple tool. He includes pricing for each category that is in the ballpark for the actual prices I get. You could look at his categories and the pricing (laid out by SF, LF, per, etc) and call a bunch of contractors and hopefully have 3 contractors provide their pricing for the items in the categories and use the average. 

Sure it's a lot of leg work, but you will end up with a pretty accurate price chart for most of the categories used in your flips and will be able to get a pretty good estimate of rehab costs. 

Best of luck!

@Nick Brubaker, If an electrician works for a large electrical company under the supervision of a licensed master electrician for years, there is no reason for him to have a license unless he wants to go out on his own. But his work is as good as, or better, than a individual licensed electrician who has been doing it for a year or two. 

If it were between a guy some friend knows someone who can do electrical work and an individual licensed electrician, I am going with the licensed one every time. But just because someone does not have a license in their name does not mean they are not authorized to do electrical work. And if working for a large electrical company under the supervision of a licensed master electrician, they can usually pull permits under that license as long as it is approved. 

Just trying to point out the difference between the "some guy" electrician and a professional electrician who may not have a personal license because he does not need one because he works for a large electrical company that has one.

Best of Luck!

@Kimberly N., if you have the 20% down payment needed outside of the cash you are using for the current project, then you could use that to secure a loan. You would also need cash reserves to start repairs on the the new project because you, nor the lender, will want it sitting there until you sell the current project. 

So the best method is to have more cash to buy out right, use as 20% down, and start the work on it. This is why many small investors can only do one house at a time. It takes a good amount of actual cash reserves even when working with borrowed money.

Good post, I am energized for the day! My oldest son has been getting into cars lately and I took him to the Ferrari dealership recently to look at some for "fun". I explained to him that even though we may be able to afford one, the burden of such a materialistic thing is not worth the true cost. Freedom is the only true wealth and if you purchase something like that, unless you are Bill Gates type rich, you will not be free. I don't think he gets it yet, but he will. 

Price is ephemeral and it is what the market will bear, regardless of what has sold on that street or what you put into it. I had a property that I listed for $380k, had full price offer 1st week. They dropped out because the drywall was not perfect where I had removed a wall and patched back in the drywall instead of re-drywalling the 10 feet. Lesson learned. Sold 2 months later for $360k.

Kitchens and baths, kitchens and baths, kitchens and baths sell houses. No master bath is usually a big problem for most buyers. Secondary baths are not as important, but I go all out on kitchens and (master) baths. I'll usually use less expensive tile or reuse cabinets in secondary baths. 

I would have considered making it a 2/2 if I could take the 3rd bedroom and make it a nice master suite with bath.

There are no right or wrong answers, this is all a risk. 

Hi @Evan Price, we do some great deck work. Let me know if you would like me to come look at what you have and see what we can do for you.

@Benjamin Verrill, all lenders, hard or conventional, will want you to have money on the deal, usually to the tune of 20% of YOUR OWN cash. With conventional, unless you get a rehab loan, you put the 20% down and have to fund the rest yourself. Conventional lenders will not accept a loan from another lender as a down payment. Why would they? You are using 80% of the purchase price of their money, and have no "skin in the game".

HML are usually not interested in funding just the repairs. They want the interest on the purchase price of the property as well and it insures they are 1st lien in case things go sideways.

If you can provide 20% down, then HML will provide a loan for the remainder of the purchase price and the cost of the repairs, presuming the property qualifies. This sounds like what you need to look for. That being said, HML are expensive and can eat up A LOT of the potential profit, so it needs to be a really good deal to make it work. Anything found on the MLS is not likely to fit into this category. I have worked with one HML and they have been fast, timely and efficient but way too expensive for most deals.

So if you have enough cash for a 20% down payment, find a great deal, get it under contract and find a good HML to work with.

HI @Nick Brubaker, I have a great guy that I use that has been doing electrical work for over 25 years. Drop me a line and I will share him with you. 

Thanks,

Chris