All Forum Posts by: Fred Pineda

Awesome job and blessings from Florida. 

Good for you @Josh R.!!! Keep at it. I do remodels and handyman work as a side hustle as well and thank God its going well. The side hustle is used to help out with my investment goals. 

Fred

@Caleb Rigby

Thanks for replying. And yes FL is very expensive. Also, thank you for sharing your settlement papers. I have one flip under my belt and it was very good (cleared $42k) but this was many years ago, about 2 years before the crash so I know times are very different now. So I, and im sure others that haven't done any flip yet, wants to be as informed as possible especially listening and learning from guys like you who have done this recently. So all the info helos and gives us the confidence to continue to look for deals that make sense. Anyhow, its great to hear your success and im sure all of us here wish you more..

Thanks

Fred

@Mike Palmer I guess now you didn't understand what I wrote. I never said he used traditional financing. I mentioned Hard Cash several times and wrote the percent they lent him 85% which is why I asked why his closing cost were so low. Thats why I listed what some of the cost are for me in my home state if I were to go with a non traditional lender ( hence - Hard Money ). 

He had to come up with the remaining 15% of the purchase price of the home and that why I was a bit confused as to the low $1706 figure he listed and didn't include the Down Payment along with his closing cost. DP, attorneys fees (either attorney or title/closing company has to record the sale weather is traditional funding or not) and other associated fees are listed in the closing statement, therefore; again the $1706 was confusing for me because it seems low. Thats is why I would of liked if he could share some light on that. 

@Mike Palmer

Yes I guess im using the closing cost and dp interchangeably. If he didn't use hard money lender than his cost would be different. I guess what threw me off is he didn't list the Down Payment and the dp might be of interest to some people here. Not that I couldn't deduce what it was but him listing cost and not including the DP threw me off. ;)

@Caleb Rigby

I understand you had to put more money to rehab the property and hold it while you sold it. The part that im curios to know is the $1706 you paid in closing cost to buy the property. It seems fairly lower than what it would cost to buy a property here in FL.  Im my original email to you, these were my questions:

When you got the hard cash from the investor you said he lent you 85% of the cost of the property correct? (I believe that is what you wrote). You had to come up with the other 15% correct? If so, wouldn't the "purchase closing cost" be more than $1706?

Or maybe im reading it wrong and the money you borrowed wasn't from an investor (hard money )

For example, these are some of the cost associated to close on a property down here:

Loan Origination Fee: 2% of whatever loan amount agreed to

Lender Origination Fees: total of $885 (underwriting, administrative, tax servicing, wire)

Attorney Fees: total of $575 (mortgage doc prep, title review, courier, closing coordination)

Walk-through Inspection Fee (paid outside of closing: $150

Tax Escrow: There will be some held at closing in order to pay taxes in November. This is determined by the month you are closing in, and the total gets higher as we approach November.

Other Fees not associated with the loan/lender:

Intangible Tax / Doc Stamps on the Mortgage

Title Settlement Fee

Lender’s Title Policy

Recording fees

and the 20% amount of the property one would buy...hard money lends 80% LTV of the property, the borrower has to come up with the other 20%

Hi Mike @Mike Palmer

It could be but just reading the post he noted it was "purchase closing cost" - and had closing cost and comm, etc separately....

Purchase closing costs: $1,706

Materials and Labor: $31,822

Holding Costs: $9,019 (includes repayment to investor)

Final Sales Price: $220,000

Closing Costs, Commissions, and Staging: $14,667

@Caleb Rigby

Congrats and many blessings on your ventures. I have a few questions perhaps you can shed some light. When you got the hard cash from the investor he lent you 85% of the cost of the property correct? (I believe that is what you wrote). You had to come up with the other 15% correct? If so, wouldn't the "purchase closing cost" be more than $1706?

Thanks,

Fred

Hi

I had some what of a similar case where the owner passed away and was foreclosed by the HOA. They sold the property in court and an investor bought the property. The tricky part was that although it was bought by an investor via the courts and they could "sell" the property, there was mortgage company that filed a claim on it. There was no movement prior to that with the mortgage company (almost 5 years) but I guess when they got wind of the potential sale, they immediately filled against the previous owner, the hoa, and any unknown person claiming the property.

In short I had no idea what it would cost to perhaps pay off the first mortgage, a lawyer, etc so at that time it was opening a can a worms. Could of being very expensive by the time I finished so I passed on it.  I do remember that the investor was eager to sell me the property for $12k but than I had to deal with the other unknowns. 

Hope that helps. 

@Angelica Osusky

Thanks for responding. I did my first flip 11-12 years ago so its been a while. You mentioned about and LLC for your flips and from my experience and current set up...it is wise to set up the LLC for your protection against legal claims. We use an llc. ...also if you need hard cash funding most lenders lend to LLC's not individuals. Again good job and God bless.