All Forum Posts by: Kent Lord

Hey Alex, your right on the sale. Turns out I underestimated the ARV and sold it for a whopping $475k. Thanks for all your help!

@Branden Pfaff Agree on that.

Guarantee Bank, Advantage Bank, First Bank and Alpine Bank is what I know to be good local lenders!

@Dan Secrist

Awesome look forward to meeting some of you guys, I’m Kent, a local up in Berthoud finishing up a flip.

@Matthew Herrera

Hey Matt, I’m finishing up a Reno up in Berthoud, shoot me a text sometime and we can grab coffee. I have a good contractor and some good contacts.

This post is my real life deal, I need to explore possible creative options.

Ideal Situation: Is to refinance the house and still cash flow. But be able to have enough cash for a 20% down payment but I would need about $40-60k to achieve that. What more important to me is doing another deal than cash flowing. 

Big Catch: In order to do this renovation, I quit working as a W2 employee, with my dad and am now doing my own electrical contracting work. Making pretty decent money with a more flexible schedule. But I cant finance with a bank anymore. Are the only options hard money and private money????? I dont plan on staying in the electrical business for long until I make it big in RE.

The Deals #'s : Currently under my first renovation of my duplex with a 30yr fixed mortgage. Berthoud CO

As a Flip

Purchase price- $265k 

$ down- 5% down

Mortgage: $1750 with mortgage insurance and escrow. 

Rent after renovation: Main house $1500/m, smaller unit $1000/m. = $2500

Reno cost: Main house- $50k, smaller unit - $20k = $70k  ($20k I invested my own $$, I need to raise $50k)

After Repair Value: $385k to $400k

Est profit if sold: [$265k+ $70k= $335k] [$390- $25k(agent+close)=$365k-$10k(est cost 50k loan)=$355k]

Total Profit as flip = $355k- 335k=$20k wow what a deal right?(sarcasm) These are very conservative numbers

As a Rental After Reno

Mortgage LTV: if 90%LTV of $390 then =$351k

Mortgage per month: $351k loan @5% int w/ $2k taxes yr = $2,200 month for mortgage payment(if I could even get it w/o W2)

Cash Flow: Rent $2500m - $2200m = $300 m (Is this worth it with only about $6k back into pocket?)

Cash back into pocket: Possible: $351k- $335= $16k - $10k (cost 50k reno loan) = $6k 

Rental summary: $6k to roll into next deal and $300m cash flow.  Is this even worth it knowing its a sellers market?

Big Main Summary Questions:

1. jf If I were to refinance this house, could I do so with out a W2 job anymore? And how long would it take this house to cash flow in order for it to be considered an asset and not a liability? (Where the house is income?) Do I need rental contracts?

2. If I was living in the smaller unit, could I have a leasing contract with myself in order to show the properties income? I mean I could essentially live rent free but I wouldn't want to jeopardize being able to claim this as income property and use it as collateral for my next deal.

3. How can I use this property as collateral for my next deal without selling it? But still being able to pay the $50k reno costs back? How bad does not having a W2 job hurt me? Does it force me to sell?

If you have come this far in reading this and decide to reply, let me just say, I highly highly appreciate you! Thank you so super mucho! If your local I would love to sit down and chat and Ill offer free (licenced and insured) electrical work for you and your family. 

If your new and read this and have similar situation, please leave a comment and let me know. Id love to connect.

Awesome, a local NOCO deal. Curious to see how this works out for you. Im assuming you had to buy it cash, what do you predict the turn around time to be for renovation? Also, are you hiring a general contractor to perform the work? Last question, do you plan to refinance this property once finished with renovations?

Im up in Berthoud flipping a duplex.

By not keeping a close eye on the book keeping hurt you for write offs or taxes?

Also did you hire anything out? How did you finance the $40k?

And did this cashflow? If it cashflowed why did you sell it, if not, how negative were you?

Also last question, how long did the renovations take?

Im asking these questions because I am doing the same thing right now in CO. Except its a heavy renovation, and its a conforming duplex. I bought it for $265k and have to put in about $60k renovation, already im in $20k of my own money and running out. The resale value could be $350-$400k. Im already in deep on this thing but Im getting burnt out and Im almost only finished with the first unit.

Thanks for your transparency. 

Matt Coffin with MC Home Services  

I have worked for him for a year now as an electrical contractor and he has been very transparent and honest.

Kent Lord with Lord Electrical Services 

Direct message me for details if you would like.