All Forum Posts by: Geren Knight III

@Richie Thomas thank you for your feedback and analysis. A lot of what you identified were areas of my concern. Since this posting, I contacted another investor in the area that I knew and worked with in the past. He indicated that the area is in fact a very rough section of town and that I would be better off to pass this opportunity up. Is there ever a reason to purchase in a high crime area?

Much like yourself, I thought the numbers look too good to be true. I just wasn’t sure what exactly I was missing. Turns out what I was missing was right in front of me, the crime data.  Is there a specific software or website that you use to verify crime data for a given city?

Thank you again. I will continue my search and post any new opportunities for review.

Thanks @Chris Davis and @Michael Heisterkamp, the area is a class C at best.  That was a concern of mine too.  I put a 20% vacancy factor in because of turnover.  What other options do I have that would make this a good deal?

Investment Info:

Single-family residence fix & flip investment in Cumberland.

Purchase price: $32,000
Cash invested: $43,000
Sale price: $120,000

One story, 1,100 square foot, 2 bedroom, one and half bath bungalow built in 1941. Major renovations including new roof, hardwood floor finishing and repair as well as new kitchen cabinets and bathroom remodel.

What made you interested in investing in this type of deal?

This property was auctioned off at significantly below market value and in a good neighborhood.

How did you find this deal and how did you negotiate it?

The property was advertise on an online auction site. Our final bid was below reserve; however, the bank contacted us for a best offer, which was $2,000 above auction closing price. The bank accepted our final price at $32,000.

How did you finance this deal?

Property financing was through a HELOC.

How did you add value to the deal?

We were able to increase the property value by improving the exterior curb appeal of the house with shutters and front door casement and pediment as well as new kitchen and bath.

What was the outcome?

The house sold received a lot of interest even before the project was completed. We were able to sell the house immediately and without a realtor.

Lessons learned? Challenges?

I learned a lot about how to manage the project and the contractors hired. I learned you must have a contract set up with each sub contractor doing the work. I also learned that spending a few more dollars and hiring the right licensed professional will save you a lot of headaches and time in the future.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

No realtors were used to sell the property.

View report

*This link comes directly from our calculators, based on information input by the member who posted.

@Garret Jones thank you! I have listened to a lot of the BP podcasts but I will go back and listen to this again.

@Ola Dantis Thank you! I am currently looking for an attorney to add to my core team. Any recommendations on what to look for in an attorney?

@Chris Levarek thank you! I will discuss my options with my CPA.

@Angelica M Garzon thank you! Your advice does help.

@Jaron Walling thank you! I have been talking with a CPA but haven’t filed any papers yet. I appreciate your advice.

I just finished my first fix and flip and I am looking to purchase rental properties this year as well as fix and flip additional properties. When is the right time to form an LLC? Will I even require an LLC or S-Corp?