All Forum Posts by: Barry Ratliff

No brainer to jump in and start early. BP has all the resource info you need and live actual success and failure stories. The books with give opinions of what to do but nothing better than learning here from professionals. Get you a local mentor to start with. Even if you have to split 50/50, its 50 more than you have now and you get a Masters Degree in actual experiences. YOLO!

I have investors up and down the scale. I'm a real estate broker experienced in coaching investors as I have and still practice some investing still.

To play it safe since you're a little tight on reserves and by the way since you're newbie investors, the lender will want 20% down, possible property manager to manage and 6 month reserves and maybe rental loss insurance.

Now finding the property, analyze the market and search for 1985 or newer smaller homes in an area the homes in or near higher priced homes. Since they are newer and probably well kept, you can even purchase them at retail prices with no fixing up needed and get above average rents. I have investors targeting those kinds of homes and purchase 1000-1200sqft 3br2ba homes from 80-92k and rent them out for 1000-1200 a month. Typical homes like these in most if not all other areas are renting for 700-900 a month. Do your homework and buy one that are ready to rent at closing.

None of the options will effect your interest rate but you should ask your banker. Threes a crowd in my book. But if to protect all, do the LLC. Then designate yourself the Managing partner and other members are General Partners and define their roll. AND to keep it simple, only create for this project. That way you have a beginning and end of that project. If all goes well, you can create a "mother" llc to throw all your projects in that. Banks like llc's. Since this one will be the first, you may have to personally guarantee the project as there is no assets. This just my opinion.

Thanks people for your feedback and conversation with each other. So far It seems that everyone has a target that is consistent and meeting your goals. If others visit this topic please share your experiences of profit making trends. Up or down?

Mike, I'm a real estate broker located north of Pflugerville in Bell County and the market is hot there and everywhere in Williamson and Travis Counties. In last 30-60 days I have experienced more investors from the south looking and buying. They tell me its to competitive and searching out laying markets. Broaden your search if ya'll are not successful. And when you do locate one there, act fast and expect multiple offers.

Thanks all for the feedback butwhat returns are you experiencing and are you seeing any trends?

I agree on the low margins thats why I am asking what others are experiencing. I coach others of flipping as well. Some have a low profit margin model so we are very prudent as well as alot of other variables. There is plenty of these properties in my area if someone wants to invest. I charge a project mgmt fee to estimate and run the jobs. Of course I pick the best properties as if I were doing. The rehabs I recommend usually only need carpet, paint, lites and misc.

I agree with Brian L. however with a twist. Tie up house with a purchase contract and a 60 day close date, get a local active investor who flips, negotiate the deal allowing you to participate and learn. Wholesaling would be the easy way out but you won't learn the art of flipping. Good luck!

I'm interested to know what net profit percentages or actual dollars everyone else is getting given last 6 months of market changes if any.

As the market seems to be improving, shadow inventory is coming on the market, not as many foreclosures being filed and banks and homeowner sellers are seemingly being stingy on negotiations. I am seeing reduced profit margins percentages on rehabbing and reselling. I am in the heart of Texas market, Killeen Temple Waco, where avg purchase price for flip is 50k with 10-15k rehab and ARV is 75k. Given the cost to purchase, carrying cost and cost to sell along with rehab, we are only averaging 7-9k net profit. Appraisals have moved north but so has sell prices.

It seems that on foreclosures, the banks are pricing homes knowing the rehab and closing costs for us to not make much anymore. I'm also a real estate broker for 27 years and have access to the markets above to follow the trends.

Seller has SS approval letter but buyer wants copy of it. Does anyone have experience in buyer receiving the sellers letter? Buyers will feel more comfortable to do inspections so they can go to closing.

Thanks YA'LL for the help. I did find out some info regarding the program. Not sure if just for Tejas but what I do know is there a 2nd lien for the 3% of the 3.5% down payment. Making it a .5% down payment loan. Getting more details.