All Forum Posts by: Jim Lowe

Thanks @Donald SaintVal. I wasnt sure if a lender would refuse me a personal loan if I told them it was for a flip or if i should play it safe and say it's for a remodeling project.  

I'm sure I can find a HML who will work with me as a first time flipper but I do get nervous about the high interest/points and timeline to be paid back. I believe I have a strong plan and can complete the flip, but with it being my first and not knowing the biz yet, I'm worried I could get screwed with a HML if anything goes wrong.

@Ruben Anthony I have considered using a 203k but I believe you have to live in the home for at least a year. I would prefer not to do that as my wife and I just moved into our current home.

I'm curious if anyone has used a personal loan to fund a rehab and flip?  I have good credit and a decent bit of cash but still need to finance in order to start flipping. I'm worried because I'll be a first time flipper, I will not be able to find a hard money lender that will lend to me. 

If you have used a personal loan for a flip, is there anything "shady" about doing it that way and did the lender know you were going to use the loan for a flip?

Hey guys, I'm very new to this(flipping) and I have some homes around me for sale that I think could be a great first flip, but then when I run the numbers it seems like I'll take a loss. Please help:

My question is about this fictitious expense report I made up and I'm wondering if this is how you guys would go about figuring out your net profit off a flip? In my head I thought a home for 50k that needed 20k in repairs with an ARV of 105k with comps selling in that same price range would be a great start. Unfortunately after I put together this fake report(below), it seems I would actually take a loss off the deal and I'm wondering where I went wrong? Any advice is welcome, thanks! Also, I know closing costs on both sides of the deal is a lot but I am thinking worst case scenario if its what's needed to make the sale.

REO list price: 50,000

ARV: 110,000

Comps: 100,000-115,000

Offer price: 50,000

Home inspection: $500

Closing costs/taxes/fees: estimated 5,500

Estimated rehab cost: 20,000

Carrying costs: 1,500

Loan amount: 55,000

Out of pocket cost: 20,500 (down payment, home inspection, closing costs and fees)

Loan terms: 12 months @ 10% interest + 3 points at closing

Total cost of house + rehab: 75,500

Sell price: 105,000

Gross Profit: 34,500

REA commission: 5% (5,250)

Closing costs: 5% (5,250)

GC share: 10% of profit (3,450)

Carrying cost: 1,500

Out of pocket expenses: 20,500

Loan interest: 1,000+/-

Loan points: 3,100

Costs: 36,450

Net profit: -1,550

Taxes: loss

I also know I may not have to pay full closing costs on both sides of the deal but wanted to include it worst case scenario 

I have to be doing something wrong in my estimates? Also, my GC agreed to work for 10% profit on the flip which is how I came up with that #. 

Hi all, I'm extremely new to the idea of home flipping, I started researching about 3 months ago and read a few books suggested by bigger pockets, I'm sure a lot of my questions can be answered in these books so I will be rereading them.

Anyways, I am trying to get a plan together to flip a house and I'm assuming I will need a hard money lender since this will be my first flip(assuming I can even find a lender to lend to a first timer), I do have a little cash, but not enough to fund the whole purchase and the rehab.

My question is about this fictitious expense report I made up and I'm wondering if this is how you guys would go about figuring out your net profit off a flip? In my head I thought a home for 50k that needed 20k in repairs with an ARV of 105k with comps selling in that same price range would be a great start. Unfortunately after I put together this fake report(below), it seems I would actually take a loss off the deal and I'm wondering where I went wrong? Any advice is welcome, thanks!

REO list price: 50,000

ARV: 110,000

Comps: 100,000-115,000

Offer price: 50,000

Home inspection: $500

Closing costs/taxes/fees: estimated 5,500

Estimated rehab cost: 20,000

Carrying costs: 1,500

Loan amount: 55,000

Out of pocket cost: 20,500 (down payment, home inspection, closing costs and fees)

Loan terms: 12 months @ 10% interest + 3 points at closing

Total cost of house + rehab: 75,500

Sell price: 105,000

Gross Profit: 34,500

REA commission: 5% (5,250)

Closing costs: 5% (5,250)

GC share: 10% of profit (3,450)

Carrying cost: 1,500

Out of pocket expenses: 20,500

Loan interest: 1,000+/-

Loan points: 3,100

Costs: 36,450

Net profit: -1,550

Taxes: loss

Hi all, I'm extremely new to the idea of home flipping, I started researching about 3 months ago and read a few books suggested by bigger pockets, I'm sure a lot of my questions can be answered in these books so I will be rereading them.  

Anyways, I am trying to get a plan together to flip a house and I'm assuming I will need a hard money lender since this will be my first flip(assuming I can even find a lender to lend to a first timer), I do have a little cash, but not enough to fund the whole purchase and rehab.  

My question is about this fictitious expense report I made up and I'm wondering if this is how you guys would go about figuring out your net profit off a flip? In my head I thought a home for 50k that needed 20k in repairs with an ARV of 105k with comps selling in that same price range would be a great start. Unfortunately after I put together this fake report(below), it seems I would actually take a loss off the deal and I'm wondering where I went wrong? Any advice is welcome, thanks!

REO list price: 50,000

ARV: 110,000

Comps: 100,000-115,000

Offer price: 50,000

Home inspection: $500

Closing costs/taxes/fees: estimated 5,500

Estimated rehab cost: 20,000

Carrying costs: 1,500

Loan amount: 55,000

Out of pocket cost: 20,500 (down payment, home inspection, closing costs and fees)

Loan terms: 12 months @ 10% interest + 3 points at closing

Total cost of house + rehab: 75,500

Sell price: 105,000

Gross Profit: 34,500

REA commission: 5% (5,250)

Closing costs: 5% (5,250)

GC share: 10% of profit (3,450)

Carrying cost: 1,500

Out of pocket expenses: 20,500

Loan interest: 1,000+/-

Loan points: 3,100

Costs: 36,450

Net profit: -1,550

Taxes: loss