All Forum Posts by: Christopher Blanco

Thanks @James Wise. I seem to be stuck. I have a good chunk of cash to start, but 1/2 of that is from HML which is expensive. This expense drives up my costs and pushes me back down into that lower area of homes. I obviously am worried about maxing out my available funds into one deal as that is all I have...I don't mind risk...but I don't want to be one and done! I want to do this for a long time :)

I need to look at that. I know we talked about doing that, but I have been afraid of the East Side (west of Cleveland Heights) for a while. Property values there are all over the place, you can go from nice area to war zone in a few blocks. Looking at some quick numbers, I might be able to get some nice 10-15K returns out of doing a few 3 month cosmetic flips, I could pay cash for them if I do them one at a time, and avoid using HML. Definitely worth looking at.

I am in Cuyahoga County in Ohio (Cleveland area) and I can tell you that taxes are a HUGE part of my holding costs. You just have to factor it in your PHS (Purchase Hold Sell) budget. 

@Kristopher Hanks So many Chris' in this thread! :) 

The problem with that strategy is it ties up my seed cash in one home for a year. Right now, I only have the cash to do 1, maybe two at a time. My plan for flipping is to generate enough cash in 1-2 years to open up the more long term strategies you are talking about. 

@Alan Russell I was thinking that as well. Thank you!

I can give you an example of one I just decided to not pursue. The asking price was $39,500, ARV was $130,000K. I originally estimated, just based on pictures that I would need to put around $50K into it, and it would cost me $25K to purchase, hold, and sell and my goal for profit was $25K since it would be a major rehab. So using my formula:

130,000 - (50,000 + 25,000 + 25,000)= $30,000

Originally that worked. After inspecting the property I realized it would need more work (including windows, re-pointing, drylocking, and a garage demo) and my new estimate was now $70,000 (my main contractor came back with a 71K bid). So that now put my max offer at $10K. That has been my issue, the amount of repairs needed to rehab the house pushes that offer price WAY too low. 

@Christopher Phillips Close to Sell. I am looking at a 1 month close to buy, 3months to rehab, 2 monts to list and sell. Those are normally my goals. I have yet to see one I would be confident in doing in 3 months start to finish. Most have been 5-6 months. 

@Christopher Phillips $20-$25K for a 3-6 month flip, it ends up being about 10-15% of the ARV

I am starting to get bummed and need a little pep talk or some advice. I have been looking at and evaluating houses in my area for fix and flip, I can't seem to find any that the numbers work on. I have started looking at the MLS, and my investor friendly agent insists that there are deals out there, just haven't found any that work. I am not geared up to do a direct marketing campaign, yet, do I need to be? Can some of the pros out there talk about finding that first house and the trials you went through?

I am getting bummed because my wife and I have found over 100 homes, I evaluated well over 30 of those, visited 10, but have made 0 offers as I can't get anywhere close to the asking price. My goal is to ramp up to doing 2 a month...if its taking this long to find ONE, I don't how I am going find 2 a month! I am calculating my asking price by taking:

ARV-(Rehab+PurchaseCosts+SellingCosts+HoldingCosts+Profit) = MaxOffer.

Am I just being impatient, or should I change tactics?

I don't know, haven't done that part yet ;) Probably a better question for a realtor.