All Forum Posts by: Austin Fruechting

@Jay Hinrichs - only turnkey providers can flip a $50k house... often with unrealistic pro-formas, lol.  

The best flip potentials in KC probably sell in the 200-300k range, sometimes higher, sometimes lower.  It's tough on the lower because the rehab costs aren't that much different for something selling 100-150k as they are for something to sell 200-300k. 

 Flipping or attracting equity partners... many people think it just happens at the beginning. How do you finance 30 rehabs in a year? How do you get investors put up all the money for an apartment buildings and get 25-40% for doing the deal? Years of experience and a proven track record.  

I can't tell you exactly how to know it for the properties you are looking at in your market. Practice and experience.  I know my market well enough and have done enough deals to estimate fairly accurately for any property I'm looking at...  a combination of having looked at hundreds of properties over the past 7 years and having purchased over 50 of those individual properties. 

If it's listed near appraisal or ARV, offering way below asking is probably going to make it tough to get a deal, especially in today's market. I wait for something that is listed at an ok deal, then try to make it a great deal, or go for off market.

I am incredibly patient while waiting for the right deal, and then incredibly aggressive to pounce when it's there. I am the tortoise then the hare. I have spent nearly a year looking once in the middle of my career when I was ready to buy.  And I have put a set of 3 duplexes under contract before other people even got their email notification that they had been listed, even when I wasn't certain where the down payment was going to come from.  Macro patience, micro speed.  Especially in today's market. Wait for the right deal, and when it's there you have to move fast as possible. 

@Ryan Keenan - If something appraises for $200k, my bank will lend up to $140k, so long as I'm putting a minimum 10% of purchase price down.  

So if I buy it at $155k - I put $15,500 down, they lend $139,500 

If I'm buy at $160k - I have to put $20k down since $140k is max loan.

If I buy really well they will roll closing in as well. Say I get it at $150k and there's $5k in closing for $155k total, they'll roll the closing costs in. So again I put $15,500 down and they'd finance $139,500 and I don't have to pay for any closing costs. 

They'll do the same for as improved.  They will appraise it as if the work is done and lend 70% of that value with minimum 10% down of everything again.  That 70% can include carry, closing, rehab, and purchase.  So say I buy something for $600k and I need $180k for rehab, carry, & closing.  $780k total all in.  If it appraises for $1mil as improved, they'll lend up to $700k so I just need $80k up front for everything. 

@George Temes

In addition to some of the other ideas like the flexible date and such, write a letter along with your offer.  Talk about your family and your son and your daughter and why you're wanting to purchase.  With someone with that much equity, and being an elderly lady, I think there's a good chance even if your offer isn't quite the best but she feels a personal connection on some level, she may still chose yours.  Your son offering to help her move in that letter would be a great idea and make even more of a connection.  People like to help good people. So having a connection and offering your help with the move could definitely help your chances. 

 You make your money when you buy!!!  Or at least I do, haha!

I buy with 10% down with my bank, portfolio lender... so long as their max LTV is 70%

 Thanks Steve.  I thought there was something else to it along those lines. 

My uncle wants to get together this evening. He's looking for some guidance on how he can carve his own "good life in ten" path.  He would definitely need to house hack to start out. 

Can you house hack every year and buy another with 3.5% down so long as you have lived in the property for at least one year?  Any other stipulations? 

Thanks for helping me help him!  I've always been aware of the principle, but have never used it. I have also used the same portfolio lender from the beginning so I just want to make sure I'm providing my uncle with correct information. 

So are you saying the 32k is all on top of the 146k + 23k ?

You'll have to pay taxes, insurance, and utilities every month that you own it too. Are you sure you would actually sell at the full ARV? Are you going to use a realtor to sell it? The buyer will probably have a realtor.  If both sides are using a realtor there goes 6% of your sales price.  You'll have closing fees when you sell too to add on top of that. So even if you sold for $215k with zero concessions you're probably only going to actually get $200k.