All Forum Posts by: Kyle B.

I work with investors that buy strictly in Englewood, arguably the worst neighborhood in Chicago. They buy a building for 30k, put 30k of work into it, have a management company put section 8 tennant(s) in there and sell it as a package to overseas investors.

Mike Berlay, I might be off on this, but I don't see anywhere in this paragraph where a sub-prime mortgage deal is implied. Mike B., my guess is that most of these international investors are cash buyers just looking for a safe, passive income stream from their investments. Is that typically the case or are they indeed leveraging up quite a bit on these deals?

Navi Veski, did I read this right?

"$40k cost to borrow $200k for 120 days." That equates to a 20% interest rate for the period and a 60% annualized interest rate. If that is correct, then you're right - that is way too much. I'm currentlly funding my first flip with my own money, but will need to use private lenders if I can get my business up and running successfully. From what I have read, hard money lenders are the most costly source of financing, and they are generally in the upper teens for annual interest rates. So 60% seems like an insane rate to pay.

I might have misunderstood the terms though. Regardless - best of luck with the verbal offer that was accepted!

Richard Lee, Giovanni Garcia, yes this is Garfield Park which isn't the best neighborhood in Chicago. Richard is right - I'm sure there are great investments in these areas as long as you are comfortable/familiar with what you are doing. Just keep that in mind - if you know this area well, then sounds like it could work out well for you.

Good luck!

Anthoy James, I definitely agree with the last paragraph of your post. Sounds like you have the money for a project, but are not finding enough opportunties - so I would definitely invest in a marketing campaign. As mentioned by others, you can also partner with people who have already found a deal but lack the capital - given all the people on this website who post about help with financing, this category of people seems to heavily outweigh the group of well-capitalized investors.

Maybe also look into developing a marketing website if you have the money and resources to do so. For me personally, this has been in the back of my mind for when I really get my business up and running (which hasn't happened yet) - for now I've just been utilizing the MLS as it sounds like you are as well.

Best of luck though!

So I totally disregarded this thread I planned on starting up. I figured to give it one last shot and see if it can garner any interest.

@Wendell De Guzman, you're absolutely right. It is a numbers game. Starting out a few months back, it took a while to comfortable with putting in an offer. Now I feel I can look at a house, get comfortable with the estimated repairs and ARV, and get an offer in the following day. So I definitely see the pace and volume of offers pick up for me.

So an update on what has happened since my initial post. I made a number of offers since then and have actually had two offers accepted. One was an older home that need about $41k in repairs and would sell in the $150 to $155k range (with potential for upside on that figure). I got this under contract for $74,100 and projected profit of a little over $20k.

For the second home, I feel like I happened to be in the right place at the right time. I took a like at this home, which happened to be in really great condition (unlike the vast majority of homes I had previously looked at), when it was listed for $75k. Shortly thereafter, the price was reduced to $60k. I quickly put in an offer for $55k and that was accepted. This home had been on the market for several months, starting in the low $100s before multiple price cuts to $60k. Funny thing about the listing was that Freddie Mac had come in and done quite a bit of cosmetic rehab to the home but did not bother to update the listing pictures. Essentially the home was being marketed as a fixer-upper foreclosure when in fact it was very near to move in ready. I've projected about $20-25k in repairs for this home ($10-$12k of which is budgeted for a new garage). I confirmed this figure with a contractor who looked through the home. The HVAC looks a bit old, so if that needs to be replaced, it will cost around $5k and the outside landscaping/deck could use a bit of work. After all this, comps of this home are selling for around $120-$130k, which makes this appear to be an awesome deal on paper - profit of around $30k.

Since I only have money for one flip at this point, I've accepted the counter offer on the 2nd home (they countered the exact same purchase price, but changed some of the closing terms). Wasn't expecting to pick up a home with such little needed in repairs, but I feel I got really lucky on this one (if all goes according to plan). I'll try to keep this post updated on my progress, so hopefully I can get some good feedback and tips from other BPers along the way.

Thanks!

I've just gotten started in real estate investing this year and decided to start a forum where I can post my progess so far. I realize it's a bit cliche to do so, but I thought this would help keep me motivated and also allow me to get great advice from the BP community when needed. Hopefully it can get other newbies motivated to get going as well. I'll start by updating my progess on a weekly basis and see if it generates any interest from the BP community.

A little background on myself, I'm 25 years old currently living and working in Chicago but looking to rehab in northwest Indiana. My family as well as my wife's family is from this area, and there are a lot of properties in this area at lower price points, hence why I'm focusing on NW Indiana. I have no background in construction and had very little knowledge of real estate getting started, although I feel I have learned quite a bit over the past several months.

I began working with an agent back in mid-April, and also have a local mentor who has flipped 30 or so homes in the area over the past several years. Also, my wife's cousin is a contractor who has helped me out with repair estimates and who I plan on hiring to do a lot of the work on a home I purchase. Since April, I have put in offers on about 10 or so homes, all of them bank-owned (usually HUD, Homepath, or Homesteps). I, don't not have any accepted offers to date. All these homes are listed on the MLS, which have been very competitive to this point, especially in particularly desireable areas. One anecdote: a house in a very good area with extensive mold issues came on the market at a very reasonable price. I eneded offernig a few thousand over asking as the listing agent let us know there were a lot of offers on the home (and my numbers still worked at this offer price). After submitting, the listing agent came back to us saying the offer wasn't even close to highest; that there were several bids significantly above asking price. This isn't the outcome for the majority of properties, but just gives an idea of how many investors are out there looking for deals.

Below is what I have currently have going on:
- One pending offer still out there, which I made a week and a half ago. This is a small 3 bdrm / 1bth with an unfinished basement. I estimated the ARV in the low $90s. Comparable homes are selling from $105-$110, but his home is on a less desirable street and very close to railroad tracks. My offer is about 15% under list price and there is one additional bid on the home. Would love to get his under contract, but the longer I don't hear back makes me feel the less likely my chances are
- This weekend I plan on seeing 4 homes, which by chance are very similar to one another and in the same general location (bi-levels with about 2,000 sq ft, the lower half technically not above ground). There is a solid comp range of about $130k for these homes. I saw a similar home like these last weekend, which needed a lot of work (~$55k in repairs). Had an offer in for this property only to find out it was already under contract - would have been nice to know this beforehand, although it isn't uncommon for deals to fall through. Have seen this with a few other homes I made offers on

Well done if you have gotten through my entire post, as I felt I began writing a novel. We'll see if this generates interest from other members, as I'm happy to share my experiences with the community. I will plan on providing an update of how my weekend house hunting goes early next week.

Thanks!

Steve Burk, glad to see you have put together a plan so quickly. I'm actively looking for properties to rehab in northwest Indiana, so if you find any deals in the area, feel free to reach out to me.

Best of luck!

After driving for dollars, a few of the houses I identified appared to be in trusts based on the county website. My question is how do I identify the best person to contact regarding the potential purchase of these homes? The information I was able to obtain from the county website was the owners name followed "Tr" which I'm assuming is short for trust.

Are these situations typically where the owners have passed away or could the owners have put the home in a trust for tax/gifting reasons (in which case I can still market directly to them)?

Thanks.

Meryl Sudhakar, getting your real estate license is a very useful thing that a lot of experienced members of BP will attest to. However, I would focus on finding a job where you can start saving money for your future real estate career. If your main source of income is going to come from being a real estate agent, you're going to need to pursue that 100%. Based on experiences with my agent, he works non stop so if you go into it half-hearted, I doubt you'll have much success. However, if you do want to become a real estate agent, this would have the potential to expose you to a lot of aspects of real estate investing.

Also, make sure to spend lots of time on BP and other resources educating yourself. And network as much as you can. Having relationships with local investors who know your market is extermely valuable.

Good luck! Hope this helps.

David Ray Moreno, my advise to you is network like crazy. It will be difficult to find financing for a deal with no experience but not impossible. I would try to find an experienced investor you can "team up" with. If you bring them a good deal they can make money on, I'm sure there is a way to negotiate equity into the rehab for you. Or at the very least a nice finders fee, where you also get to experience the rehab process from start to finish. Bigger Pockets is a great place to find someone like this, and even better, your local real estate club. So I would recommend looking into this.

As for your fulltime job, you will just have to work into the nights and weekends for this, as many people on this site already do. Don't worry though, you are young and have plenty of time to learn and develop a RE business. I'm actually just a bit older than you and have been actively looking for my first rehab deal myself. Still have a fulltime job so have to spend good chunks of my nights and weekends looking for and analyzing deals.

Best of luck!

Kyle