All Forum Posts by: Johnny L.

@Johnny L. Have you talked to any of your local community banks or credit unions?  Sometimes they are a little more flexible than your larger banks.  And as you grow, you'd probably want to look at opening some real estate investing lines of credit.  

@Odie Ayaga This guy is spot on. Hit on every lesson I learned on my first flip.. No guarantee you sell within 12 months. Paying cash for the house limits your from grabbing other deals. It will definitely cost more than you think on your first house. It also won’t sell for what you think on your first one.. Don’t get stretched thin!

@Odie Ayaga This guy is spot on. Hit on every lesson I learned on my first flip.. No guarantee you sell within 12 months. Paying cash for the house limits your from grabbing other deals. It will definitely cost more than you think on your first house. It also won’t sell for what you think on your first one.. Don’t get stretched thin!

@Johnny L. the purchase price plus rehab is only 15-20K? You're unlikely to find any lender that will lend less than 50K whether you're brand new or the most experienced investor. Terms and extensions vary from lender to lender. Most have a term of 12 months but can extend from anywhere to 1 to 12 months (though 12 months is typically more for larger projects). I'm presuming when you say mortgage lenders you mean conventional as most hard money lenders won't have prepayment penalties.

@Johnny L.

1. Get a conventional loan for 80% ltv, (This way you don’t pay mortgage insurance). Make sure there is no prep pay penalty. Take an interest rate at 0pts, because you’ll never hold it long...

2. Fix the house up with your cash, and have enough to comfortably do the rehab and make payments for worst case term. Use the credit card strategy to just buy material and use a cc that you get mileage rewards and double drip on the benefits. (After you close on the flip take a trip and relax! Recharge for the next one.)

3. Don't buy any house retail off MLS and look for an REO or foreclosure. I would never buy above 80% of ARV. There's tons of deals everywhere don't get desperate.

4. Build up your experience, after three deals in a year, you can go to any hard money lender and show them your track record and get 8% money all the time, and they’ll find your rehab to 80%.

5. Grow your rehab and real estate team. Keep improving your processes and talents of others. Stay humble and find ways to give back to your community. Do these things and you’ll do great!

@Johnny L. Try hard money lenders

@Johnny L.

Thanks. I’m glad to be back to my passive investing in mobile homes & actively doing silver & crypto!

The Lowe’s card was great especially because they were doing 10% discount at the time.

I would look for a card that has longest 0% timeframe & low fees for cash into account immediately. Also consider your credit limit on each card as to protect your credit score as much as possible. Citi typically is longest at 21 months & also look for any signup bonuses to reduce expenses.

@Johnny L. I used several credit cards on my first flip.  I used it to pay some vendors and to buy materials.  In my opinion, credit cards are definitely not ideal.  Taking out a small mortgage is another option if the property is able to be financed.  But if it's not, you have to do what you have to do especially on this first one.  Make sure you get that card paid off timely though.  And as you develop a track record, I'd start looking at connecting with some private investors.  A few words of caution though. 1) If this your first flip, you might not want to buy property that needs massive rehab.  Too many unknowns for your first one, 2) Get the property inspected BEFORE you buy it, 3) don't use all your cash to buy the property and only have the credit cards to fund the rehab.  That will leave in a very illiquid position, 4) and if you mess up (which you will, lol) man it is not the end of the world.  Just take all of the bumps as learning lessons.  

Honestly, I'd be worried about doing this if it's your first flip. What if things go wrong and you get delayed?

I would look into taking out a small mortgage, and using the leftover cash to fund the rehab. Of course, that will cost you a couple grand in mortgage fees, but its a small price to pay for peace of mind and reduced risk.

i did a flip with credit cards last winter that made $36k & was extremely stressful because we did most all the work ourselves besides foundation.

It kept my friend who did maintenance & rental rehabs & more from college away from bankruptcy court.

I had 809 credit score at the time & used 7 different cards & promotions to pay the whole $30k for the flip costs most was charged at Lowe’s for discount gift cards (highly recommend plus coupons) without the 3% fee.

I was able to pay off all the cards before crazy high 20%+ interest hit as it sold in days for good money.

Frisco is an extremely hot market in Dallas right now & way overpriced...

But during downturn may only drop 20% because of strong local jobs base nearby.