All Forum Posts by: Celia Lumbroso

Hi @Adam DuCharme great question and more than happy to discuss this further in-depth. 

A few things to additionally consider costs upfront is the appraisal cost and insurance costs. Alternatively, you can have these paid on the HUD at closing but that means you will get less funds/cash out at closing.

A lender I previously worked for would collect a deposit upfront from the client to cover the appraisal cost and some still utilize this action. 

Hi @Yoni Meth

Great question on this conversion. 

I would strongly suggest getting a survey completed on the property so you're aware of all the legal parameters of who owns what.  A title report is crucial and will specifically display any contractor liens, easements, and other miscellaneous items. 

Hi @Jason Hutcheson

This is a great question.  I have over 6+ years in the private lending space. 

Happy to discuss further in depth as well. 

Hypothetically, let's say your investments go sideways and the lender wants to foreclose. Since the properties are in your personal name, you are open to more risk as the lender can look to go after multiple assets. 

I strongly suggest putting your properties in an LLC due to the tax benefits but also lowers your risk exposure. By creating an LLC for each individual property you own, you limit your exposure and risk to that property itself and the lender cannot necessarily go after multiple assets.

Hi @Ben Fernandez

More than happy to hop on a call to discuss further in-depth and learn about your investment goals. 

Things to keep in mind when pursuing your first fix & flip:

-Target market (Do you want to stay inside Colorado or search markets out of state) 

-Liquidity/Reserves (How much do you have to contribute to the deal, need skin in the game) 

-Consider taking title in an entity such as an LLC vs your personal name (Tax benefits, reduces risk, etc)

-Will your fix & flips be cosmetic or a full gut rehab? 

-Network on real estate meetups with other investors to gain their experience/shortfalls

-Have (2) contacts for everything. Roofers, plumbers, property managers, contractors, etc

-Ensure credit is in good standing (Limit delinquencies, late payments, etc to get better terms with lender)

Hi @Brandon McLeod

Welcome to the BiggerPockets community. 

The advice I have for you if you're starting out in fix & flipping is have (2) contacts for everything. (2) contacts for plumbers, contractors, roofers, laborers etc to get the best pricing. Also have 30K in reserves at minimum, setup an LLC, and decide if you're going to bring on additional members or be a single member LLC.

If you decide to obtain a loan, having an additional guarantor in your LLC will provide you with better rates.

3. I like the DSCR loan route the best if you truly think the neighborhood will improve. 3-5 years is quite awhile but a DSCR loan for 30 years may be helpful in this instance.

If you would like to discuss more options in general please feel to reach out

Hi @Reagan C.

If you do not want to use a loan, only have 80K cash saved, and want a quick ROI then I would pursue the land route. Buy vacant land, split the lots, add on water wells, lightpoles etc and then sell it to a developer.

If you have no experience fix & flipping you will likely encounter unexpected and inflated costs especially with the current market. 

@Christina Baliva

Hot markets for 2024 fix & flip (in my opinion): 

-Ohio, Akron specifically 

-Detroit, Michigan

-South Carolina and North Carolina

-Nevada (Las Vegas) 

Have more markets in mind, reach out to me if you're interested in discussing further 

@Sara Johnson

Hi Sara. Great question.  As others have mentioned it comes down to how much time do you have to commit, liquidity, and previous experience.  Given this is your first investment property, I would suggest pursuing a cosmetic rehab on the property vs a full gut.  The full gut may be a lot to take on for your first investment project and will likely cost a lot more than cosmetic. 

Please note- to minimize risk and issues have (2) of everything.  Have (2) contacts for contractors, roofers, plumbers, designers etc.  This will help you compare costs and navigate issues around third parties.  Hope this helps!

@Ramiro Ramirez Believe I can help- reach out to me when you have a moment.  

Thanks.