All Forum Posts by: Jennifer Petrillo

Sell the 17K vehicle and buy a reasonably priced, reliable, low maintenance used Toyota or Honda for under 10K. Having that much money invested in a depreciating asset is holding you back from building future wealth. You need the cash more than you need the fancy ride.

Call your mortgage company, tell them you want to access the equity in your home, ask them to come up with both HELOC and cash out refinance options for you to consider, hopefully they will have a good loan officer who can come up with several different deals for you, explain the loan obligations, and you can pick which works best for you. We just did a cash out refi on our own home in order to buy a vacation rental investment property. Our mortgage company offered us two HELOC options, both at around 5%, and the cash out refi for half a percent more than we are paying now. The refi was a better option for us overall. When we closed, we had the funds wired directly to the escrow account of the attorney who is handling the investment purchase for us, it didn't even pass through our hands. You can do this with any bank, of course, but I feel that going to your current lender makes them want to come up with a nice deal to keep you working with them. I also spoke with a small local bank and also a private lender and both offered me interest rates > 6%.

If you enjoy learning and don't mind working hard for your success, go for it. You have to have a passion for doing this. And it's better to try it now when young, you have that much longer to learn and get better at it. I would say, though, that you do not need to be an agent, in fact many agents know very little about REI, flipping, buy and holds, etc. Not sure that the education you get as an agent would do much for you. Listen to the BP podcasts and read some basic articles on BP to get you started thinking about what you want to focus on in real estate.

Listen to the BP podcasts and read J Scott's Book on Flipping Houses. Check your local library for other flipping books. Read the articles on flipping on BP. Then you have to learn your local market--what do houses sell for? What is the housing stock like (big or small apartment buildings, 3/2 SFRs, McMansions, etc)? Are you in a good school system or is there one nearby that you can focus on? Try to find a good General Contractor through word of mouth referrals, this is someone who will be a key part of your house flipping team. You are unlikely to find a realtor to "show you the ropes." Believe it or not, many realtors know little about flipping houses, plus they are not going to want to work with a newbie for free and might steer you wrong on a potential deal. Just search listings for now and, since a key thing with flipping is buying undervalued homes, make yourself familiar with Auction.com, Hubzu, Homepath, Williams and Williams, other auction sites to see what is available in your area. When you are ready to make some offers, then ask a realtor for an opinion on after repair value and consider whether there is enough of a spread between purchase price and after repair value (ARV) to put some money in your pocket. Learn the formula: ARV x 70% - repair costs = the price you should offer for the house.

This house will have no/very little equity in it by the time you are done. You need to walk through with a GC and get a true estimate of all the work that needs to be done. Are you confident about that appraisal? Who ordered it? Look on Redfin yourself for recent nearby comps. You could easily get overleveraged in this house and if you can't sell it high or rent it out high, could end up with negative cash flow. And why is the amount of the mortgage still on the property relevant? The seller is only walking away with 210K (and that's before paying commissions, etc), maybe that's all they want, but you need to go over this house with fine tooth comb and look for the possible hidden problem that will rear it's ugly head after closing.

Who is doing the work? Typically the contractor pulls the permits and they will know what parts of the job need permits. The permit itself is your evidence that you got a permit for the work, you will also need a certificate of occupancy (CO) from the building inspector when all the work is done (this is to make sure the work was done to code). Some types of work require inspections by different inspectors, for example chimney work requires an inspection by a state fire inspector. Your GC should be able to guide you further.

You have to look for very undervalued properties that have a big profit potential--foreclosures, auctions and the like. You make money when you buy in this business. Buy low, fix it up (be careful not to overimprove beyond your market or you won't get the money back out of it that you put into it), sell at market value--the difference is your profit (yes, this is simplified, but it really does come down to three numbers--the cheaper I can get it for, the more I can potentially make). But, to buy super cheap properties, you have to have 1. the money to fix them with and 2. a good crew to do the fixing! Finding the right property can be very tricky in some markets, takes patience and persistence. I don't know what your area is like but you could start by looking up foreclosures on Zillow or Homepath and the auction sites (Auction.com, Williams and Williams, Hubzu, many others) to get an idea of what is distressed and what the cost is in your area. Read J Scott's The Book on Flipping Houses for all you need to know.

RMS Title & Appraisals in Lakehurst, very professional, very quick, very happy with them, will use them again and again.

@Joseph M., yeah I was shocked too. The property is 4 beautiful acres in a nice area in the best school district in the county. Appraiser was from the lender and appraised it at ARV based on my scope of work. Needs 100K--including new roof and septic. I don't know if I will list it for 390K, though--rehab will be done in November, not the best time to list. Also the house has some quirks--a 1955 Cape with one normal size bedroom and two small bedrooms, small bathrooms that can only fit a 4 foot shower enclosure (no tub, some people care about this, some people do not), detached one car garage...what I will have to overcome is that people in my area spending that much for a house want a big McMansion on their four acres, not a charming 1950s stone cottage. And people who don't mind living in a smaller house typically won't have 390K to spend on a four acre spread! It is really a farmette--has 3 fenced pastures, a creek and a small barn with two horse stalls, it will appeal to someone with animals. What worked in my favor was that none of the listings I found stated the acreage--I had to dig for it. Found it on one listing only (I forget which website had it correctly) and double checked on the tax map. I knew the bank did not know what they had and this is probably why I did not have competition either. And that was my point--sometimes ridiculous offers work with foreclosures because the bank does not really know the true value of the asset. Often these properties (foreclosures) have changed hands so many times that the details get lost...they get listed with wrong number of bedrooms/bathrooms, wrong acreage, wrong school district. If you do some homework, you can occasionally score big. I always feel that I have an advantage over the banks because I can go check out the property in person and, as a local, I have a better sense of what will sell well.

HELOC or cash out refi on your primary home. Probably the cheapest money you can get if you have the equity. Call your mortgage company to start, they will want to keep you as a customer and likely have someone in their loan dept who can come up with different loan options for you to choose from.