All Forum Posts by: Mark Fedorov

10-15%, the duration would be there estimate on the time of the project, max of 2 years, 1 year is more common.

If you are starting off new, you should be expecting to put more money down (30-50%), if you find a new Hard money lender you may get a lower rate, but don't expect anything close to a bank rate.

Yeah,,, that is risky, if possible.

So the hard money lender or owner financing will be charging you like 10%, then when the repairs are done, you go to a bank and hopefully get a loan for like 4-5% for 80% of the market value (this is is iffy, some banks only give 80% LTV for purchases, but you will be refinancing).

THEN with your loan at 4-5% find a buyer (re: sucker) to buy at Market price, and since they won't have cash, they need you to finance the sale, and you charge them the 10% after they give you a down payment....

Sounds great.. but.

- You need to find a hard money lender. or a owner willing to finance, who will sell a building (way) below market.

- you need to make the repairs at your budget, and be able to sell the building at what you proposed,

- you need to find a bank wiling to give you a fixed loan for a refinance, and who will be cool with you keeping the loan even after you sell the house to the next buyer (most banks would want you to have the title to the property that you have a mortgage on)

- and you need to find a buyer who will pay market, has money for a down payment AND can not get a loan from a bank

...real low probability of this all happening.

Using the HELOC would be quickest. You could re-finance and cross collateralize your two existing properties, but that may be a few thousand up front.

Relative to other options I would think the HELOC is best, maybe get a fixed rate equity loan on the other property if you are afraid of interest rates going up (and they will)

PM me, I have options depending on the size of the job.

The local newspaper should still have death notices

The phone book still has people's addresses.

Don't do your first one away from home.

Your planning for time and costs will be off, and you don't want to be away from your support networks and you don't want to pay for a hotel and extra living expenses. 

There is land between Manhattan and "The South"... look at Queens, Jersey City, Yonkers, Union city, some place you can commute to. 

Start small.. like really small.. bungalow small. Try it, you won't make a lot but you won't loose a lot.

And do more planning.. a flip, assuming you need to put one month of construction time into it will take 5 months from cash in to cash out.

April 1- Agreement of sale and your down payment (2 months to Title search, get loan/ money, insuance locked down, organize contractors, get permits, make plans, get equipment, turn on/off utilities)

June 1 Settlement

June 2 start work, June 30 finish work (let's assume it is on schedule)

July 1 listed on MLS

July 2 receive agreement of sale (this will not happen do soon, but for this example, sure)

August 31st - settlement.

You don't want to be worrying about something so far away for so long.

I would take this as a "best use" analysis. 

You have some options, but you need to see which is the best use, so do the research about rates for storage spaces in the area, I would think that the demand for small, 80sqft spaces would be different then say 300sqft spaces... call the local publi storage and find out what size of storage space they are sold out of, and make that size.

Also, you may be able to rent to people who do light manufacturing, or I saw a place that someone was doing an ebay bussiness in a windowless basement. There may be other options other than  just storage.

First, you should check with the zoning officer to find out what is permitted.

When you "Analyze" something, you do the math to find an answer... What is the return? how much cash do I need? how much cash out per year? how long can I not get rent and for me to afford the mortgage payment?

What is your goal? What information do you want in order to make a decision to buy or not? 

If you just want to measure return,  you take your cash out and divide by your down payment (plus any closing costs) you have your cash on cash return... that is a good metric to judge one option vs the next.

County tax assessment office (or web site) will be able to tell you where they mail the tax bills. That should be free information.

Good luck.

Find a place that is offered with Seller financing.