All Forum Posts by: Lauryn Meadows

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Hey! 

Does anyone have experience purchasing homes that have large Medicaid liens on the property? Nursing home guidelines are telling patient's family that the house must be sold for what the auditor's appraised value. This property has several repairs to be made, making that difficult to do as a flipper. 

What steps have you done to lower the sales price that Medicaid will allow in this situation? For it to be a win win for the family and as the purchaser. 

Join us in downtown Ashland, KY at the Delta hotel to discuss RE investing. 

Question for my Investher CPAs.

My husband works full time in our real estate business, I believe he should have no problem qualifying for real estate professional status.

I work at W2 and have a 1099. We also flip houses.

We purchased and rehabbed a 4 plex this year, that I would like to take accelerated depreciation on to offset income from my W2/ 1099 and our flipping business.

Question 1- did I need to have a cost segregation study done in 2021 in order to do this?

My CPA says we don’t want for my husband to qualify as a real estate professional status because he will be subject to self employment tax, and not receive social security credits (not super concerned about that because the plan is to be FI long before social security kicks in- if it’s even a thing by the time we are that age.)

Thanks for any advice. 

Investment Info:

Single-family residence fix & flip investment.

Purchase price: $18,000
Cash invested: $70,000
Sale price: $116,000

Fix and flip in Ironton, OH. We utilized a private money lender for part the purchase and rehab costs. We utilized our cash for the rest of the funds needed. The private money lender earned 10% interest with a six month balloon, or at sale of property. We were able to to turn the project within four months from start to finish.

Purchase Price: $18,000
Rehab Cost: $64,500
Closing Costs: $8,000
Money Costs: $5,600
Net Profit: $20,000

How did you find this deal and how did you negotiate it?

We found this property through word of mouth. The owner just wanted out of it.

How did you finance this deal?

Mix of cash, and private money lender.

How did you add value to the deal?

We did a complete rehab on this project. All new everything.

@Colby D Hollins

We've only utilized for short term lending at this point on single family flips and a small a multi BRRRR.

For the 5 unit BRRRR we knew someone that needed to get funds from a home insurance claim. They needed to purchase a house with a bunch of different nuances to get the full amount from the policy. We partnered with them, and worked with the insurance company to purchase the five units with cash, and rehab. Once the property was stabilized we refinanced and pay them back their insurance claim $, plus interest.

For the flips, we’ve also used for short term lending. We paid 10% on the amount lended with a 6 month ballon payment, but typically we close and the investor is paid back in 4 months.

What a great question @Kaylee Walterbach! 

In 2021 I've got out of my comfort zone, and started utilizing private money from individuals. It's extraordinarily rewarding when I've created returns for my investors, jobs for contractors in my community, nice housing for my tenants/ buyers all while creating wealth for my family! 

@Shlomo Koheler Thank you! It ended up being a win for everyone.

Investment Info:

Single-family residence fix & flip investment in Ironton.

Purchase price: $40,000
Cash invested: $70,000
Sale price: $179,900

Fix and flip in a rural and desired part of our community.

How did you find this deal and how did you negotiate it?

This was a foreclosure that had been on the market for a while. We made multiple offers over a few month period- at the same asking price. Finally we got the property!

How did you finance this deal?

We used our HELOC and our cash.

How did you add value to the deal?

The house had been on and off the market for a while, but the septic was on the next door neighbor's property rather than on the property of the house (a foreclosure). With that being said, it did not qualify for conventional financing, making the cash investment too high for most in the community.
We ended up negotiation with the neighbor and bought the parcel of land that the septic was on. This was cheaper than installing new, plus gave the buyer more yard.

Investment Info:

Single-family residence fix & flip investment in Ironton.

Purchase price: $15,000
Cash invested: $60,000
Sale price: $112,000

Fix and flip property than we purchased and renovated with our HELOC.
Purchase price: $15,000
Rehab: $60,000
Total Investment: $75,000
Sale Price: $112,000
Closing Costs: $8,600
Net: $28,400

What made you interested in investing in this type of deal?

It's a great way to earn capital, you have the opportunity to provide a like new home for someone that otherwise wouldn't be able to make that happen and you get to improve the community!

How did you find this deal and how did you negotiate it?

This was a friend's parent's house that they rented for years.

How did you finance this deal?

We used our HELOC to purchase and renovate.

How did you add value to the deal?

ALL. NEW.EVERYTHING.

What was the outcome?

We improved the community, got some awesome buyers into a great home and made some money.
BONUS- we had a nice warm place to stay when the ice storms came through the United States in Feb. 2021. We packed up our TV, Keurig, some clothes and blow up mattresses and left our cold/electric-less house and hung out at the flip house for a few days.

Lessons learned? Challenges?

This was actually a more seamless project- we actually came in on budget. There was a tree we needed to cut down (very costly) and it bordered the property next door which the city owned. It took a while, but we negotiated with the city and a local nonprofit that focuses on the revitalization of Ironton and we all split the cost.