All Forum Posts by: Chris Shon

@Elizabeth Seiferth Thanks for sharing! Definitely sounds like you were in a similar situation. May I ask which Rookie Reply podcast you are referring to? 

As an update, we fired our contractor and found a new one who should be finishing in the next 1-2 weeks. We ended up adding a bath and closet to the large bonus space instead of an addition. 

The markets still not looking great in ATL so I'm hoping that we are able to sell at a decent price and consider it a miracle if we broke even. Some money will most likely be lost. My goal is to just minimize it for now and stop the bleeding. 

Worst case we will have to extend the HML or try a DSCR loan, but managing rentals from across the country doesn't sound very appealing especially with more upfront costs to furnish and add amenities.

Hi BP Community! 

We desperately need to replace our contractor who has dropped the ball with permitting and the build of an addition to complete a Reno for a flip. It's putting us ina very bad position with our lender and timeline. 

I wanted to ask fellow investors if there's any you'd be willing to refer or recommend. The property is in Decatur and we need help with permitting and finishing the construction ASAP. 

Thank you in advance for your help! 

Quote from @Caleb Brown:

All around it's a tough pill to swallow. If you can find a GC and realistically get the project done I would finish it and sell. That would further drive up holding costs and who knows what the market has in 2-3 months. You can connect with investors to get a feel for As Is where you'd net. Sorry you are dealing with this, permits is something I avoid when working with clients. Being remote there are so many delays and unknowns where it's not worth the head ache. 

This is the goal for the time being. I agree remote investing and permits are not a good mix!

Quote from @Matt Devincenzo:

Have you evaluated if you just reduced the SOW to make it a 3/2 and then sell? If your value has come down but you can reduce the rehab to just enough to add the extra bath that may be the absolute best 'margin' on resale options. 

 Not a bad idea! We will look into this option as well. 

Quote from @Chris Seveney:

I won't tell you what to do but - What I have seen in many of these situations is people have rose colored glasses on what it costs to complete and the time it takes and would have been better off selling immediately over continuing the bleeding. 
if I knew what my losses were I would accept them vs trying to fight through too many unknowns especially managing from afar 

 You would take the $73K loss? 

Quote from @Mike Rethis:

How do these properties compare to yours as far as condition and amenities?

2174 Juanita St, Decatur, GA (3/2 SP:390,000)

2091 East Dr, Decatur, GA (3/3 SP:416,500)

2200 Juanita St, Decatur, GA (3/2 SP:340,000)

These are all in your immediate area, closest comps within 6 mo sold timeframe. Keep in mind this is just a quick zillow comp- so I can't really see every detail and condition to tell you how well they would compare. But- Price, SQ/FT, Bed/Bath, Location is all comparable.

What does your agent think?

Where's the bathroom going, master suite? 

Also, how much would you save by forgetting the 4th bedroom and just adding the extra bath? That's more important. If it's not much more expensive, 4th bedroom could definitely be worth it, especially from a consumers perspective. Since there's a lot of competition on the market in your area (mostly 3 beds), the 4th bed could help.

From a quick search, I don't see why you can't get close to your projected sale price if you do it correctly. But there's a lot of unknown on my end.

In my market, things slow down in August and come back up in Sep. Could be different in your situation but worth noting.

2336 Mark Trl, Decatur, GA - ON MARKET $370,000

Thanks for taking the time to look into this Mike! The 6 month comps look good, but IMO the market looks like it's trending downwards and the 2336 Mark Trl property has been listed for over 90 days. I hope we can get close to what these comps are asking for. One concern is that the finish quality isn't what we were expecting, which will definitely impact the final price. But these are better than what I'm seeing currently listed. 

The bathroom and closet will go in the bonus room to turn it into a master suite. 

My agent thinks it's worth listing as 3/1 to see what the market will pay for and re-listing once the additions are complete as a 4/2 w/ patio. If that doesn't sell by early Sept, we're either going to 1) sell and take the loss or 2) refinance and do Mid-Terms rentals to hold until the market goes back up.

Hey BP community

My business partner and I are in the middle of a tough situation on a remote flip project in Decatur, GA (zip 30032), and we’re looking for advice from seasoned investors who’ve been through similar. We’re based in Los Angeles and open to creative or unconventional strategies as long as they help preserve capital or minimize losses.

We’d strongly prefer to exit with at least a break-even outcome, or pivot to a hold strategy that preserves the capital and gives us another shot at resale in 2026 when market conditions might improve.

Property Overview

• Address: 2326 Mark Trail, Decatur, GA 30032
  Purchase Price: $198,000 (Sept 2024)
  Financing: $248,900 Hard Money Loan (HML) — extended until Sept 23, 2025
  Monthly Holding Costs: $2,800
  All-in Costs (w/ agent fees, holding, rehab, staging, overages): $354,174

Originally a 3 bed / 1 bath with a bonus room. The plan was to convert it to a fully permitted 4 bed / 2 bath with a back patio and flip it by Feb 2025. Rehab delays and permitting issues pushed us into June 2025, and reno is only ~75% complete.

Renovation Status

• - Permits for the addition are just getting finalized. But contractor hasn't made any progress in over 4 weeks.
  - Floor joists for the addition are exposed in the back
  - Second bathroom and closet still need to be built
  - Back patio and landscaping still pending
  - Last draw from HML will fund completion (already built into cost basis)

ARV & Comps

We originally comped the flip at $375,000+. Now, based on recent comps and our contractor’s finish quality, we’re realistically looking at $325K–$345K on the open market.

Recent Comps:

- 4/2s in similar finish: $299, $320K, $340K, $355K
- 3/1s: $220K–$270K

Options We’re Weighing

Option	Net Result	Notes
1. Sell As-Is (3/1)	~ -$73K loss	Fire sale — not viable
2. Refi + Long-Term Rent (LTR)	~ -$46K loss	Rents ~$2,200/mo, negative cash flow
3. Refi + STR or MTR	Hold + slight cashflow (Keep ~46K in the deal)	- ~$300/mo with STR, goal to sell in 12-18 months. - $12,000+ additional capital required to furnish. - Self Managing will be tough being remote. - Property Management costs would null out cashflow.
4. Finish & Sell as 4/2 at $335K	~ $27K loss (Break even at $355K)	- $360K is unlikely now based on finish level.

What We’re Looking For

• Has anyone been in a similar position?  What would you do in this situation?
• Are we missing creative strategies that might open up other opportunities?
• Would you STR this property or MTR it and ride it out?
• Would you finish the flip and price aggressively to just get it gone?

Appreciate any advice, thoughts or critiques. We want to learn and make the best possible decision at this point. Feeling very defeated from this being our first investment. We really thought we had a good deal with a lot of cushion, but we made bad choices and gave our contractor too much time and trust.

Thanks in advance 🙏

Hey BP community

My business partner and I are in the middle of a tough situation on a remote flip project in Decatur, GA (zip 30032), and we’re looking for advice from seasoned investors who’ve been through similar. We’re based in Los Angeles and open to creative or unconventional strategies as long as they help preserve capital or minimize losses. 

We’d strongly prefer to exit with at least a break-even outcome, or pivot to a hold strategy that preserves the capital and gives us another shot at resale in 2026 when market conditions might improve.

Property Overview

• Address: 2326 Mark Trail, Decatur, GA 30032
  Purchase Price: $198,000 (Sept 2024)
  Financing: $248,900 Hard Money Loan (HML) — extended until Sept 23, 2025
  Monthly Holding Costs: $2,800
  All-in Costs (w/ agent fees, holding, rehab, staging, overages): $354,174

Originally a 3 bed / 1 bath with a bonus room. The plan was to convert it to a fully permitted 4 bed / 2 bath with a back patio and flip it by Feb 2025. Rehab delays and permitting issues pushed us into June 2025, and reno is only ~75% complete.

Renovation Status

• - Permits for the addition are just getting finalized. But contractor hasn't made any progress in over 4 weeks. 
  - Floor joists for the addition are exposed in the back
  - Second bathroom and closet still need to be built
  - Back patio and landscaping still pending
  - Last draw from HML will fund completion (already built into cost basis)

ARV & Comps

We originally comped the flip at $375,000+. Now, based on recent comps and our contractor’s finish quality, we’re realistically looking at $325K–$345K on the open market.

Recent Comps:

- 4/2s in similar finish: $299, $320K, $340K, $355K
- 3/1s: $220K–$270K

Options We’re Weighing

Option	Net Result	Notes
1. Sell As-Is (3/1)	~ -$73K loss	Fire sale — not viable
2. Refi + Long-Term Rent (LTR)	~ -$46K loss	Rents ~$2,200/mo, negative cash flow
3. Refi + STR or MTR	Hold + slight cashflow (Keep ~46K in the deal)	- ~$300/mo with STR, goal to sell in 12-18 months. - $12,000+ additional capital required to furnish.  - Self Managing will be tough being remote.  - Property Management costs would null out cashflow.
4. Finish & Sell as 4/2 at $335K	~ $27K loss  (Break even at $355K)	- $360K is unlikely now based on finish level.

What would you do in this situation?

• Has anyone been in a similar position? 

• Are we missing creative strategies that might open up other opportunities?

• Would you STR this property or MTR it and ride it out?

• Would you finish the flip and price aggressively to just get it gone?

Appreciate any advice, thoughts or critiques. We want to learn and make the best possible decision at this point. Feeling very defeated from this being our first investment. We really thought we had a good deal with a lot of cushion, but we made bad choices and gave our contractor too much time and trust. 

Thanks in advance 🙏

Quote from @Michael Plaks:

Here is an example of what it costs you to avoid professional advice. Your LLC saves you absolutely nothing on taxes, unless you will end up making a killing on this deal or have other juicy deals - and that is a big IF.

But what you did accomplish is that now you owe $800 per year to your greedy state of CA, even though the LLC is formed in another state. I would have advised you against an LLC, most likely, contingent on your attorney's legal protection concerns.

This is assuming that by "we" you meant your spouse. If you partnered with someone other than your spouse then yes, LLC was a good idea, since you now have a partnership. Which is very complex and costly and likely warrants professional help.

Now, if it's just you and your spouse, then your 2024 tax preparation is likely relatively straightforward:
- you will create a Schedule C on your personal tax return
- you will NOT report any costs of purchasing the property or its rehab, not in 2024
- you will report your business overhead expenses such as marketing, driving, technology etc
- you will end up with a business schedule showing zero income and some expenses - not breaking the rules but potentially raising an audit flag

Can you do it yourself? Probably. Can a professional accountant do it better? Probably. Is it worth it? Hard to say. Please read this:
https://www.biggerpockets.com/forums/51/topics/1088325-expla...

Thanks for the detailed response! Wanted to clarify a few things if that helps. 
1. I don't think we owe $800 in CA, we incorporated in GA and have a registered agent in GA. 
2. The LLC is a partnership between myself and another friend who's also an investor. Not my spouse. 

Anything else that might be worth mentioning based on this?

Hello BP community!

We started an LLC last year and are about to file our first return for 2024. We have purchased a property for flip that's currently under renovation. I wanted some advice on whether we need a specialized tax accountant for Real Estate. They seem to be very expensive and I'm not sure if it's something absolutely necessary or not.

It's a GA LLC, but we're based out of CA.

Any direction would be much appreciated!