All Forum Posts by: Joel NA

Man, what a nightmare! I appreciate your honesty and willingess to share this adventure. Good luck!

Great perspective....thanks! I will let you know how it works out IF I go forward.

Jon...just spoke with my banker...he said he didn't have a problem with me paying off my loans because his institution is selling them anyway...thanks for the heads up though...

I have a college rental. I would like more, but "buy rights" are tough to come by and rare on the MLS.

Buying right might not be so important for you because you'd be paying rent somewhere anyway. I do have it rented until August, 2011...the kids sign 9 months before they move in which is nice. Proximity to campus makes a difference, I'm told.

The kids here sign 12 month leases.

Hey Chris

1. I posted something similar earlier-- looking for private money contract examples. I didn't have much luck, but did get some good advice. I was told by members of this forum to have a lawyer look over any agreement. I've since been researching local RE lawyers.

2. I'd say the cheapest money you can get, the better for you, right? Whichever option costs you less to borrow would work best. I've been dealing with those same issues, too. One private loan source wanted partnership and I didn't want that. It's tough negotiating when the private money lender is friend/ family.

3. You might have already done so, but make sure you read about ARV formulas and other flipping advice on here. BP's a goldmine as you probably have figured out. I've been reading this forum for years and I learn something new and valuable each time I log on. I don't know how much you know already, but understanding ALL the expenses of flipping is obviously essential.

If you're making a 50k profit and paying for all expenses, than I'd say you are doing pretty well! If you post particulars in the "analyze this deal" forum, you'll get feedback.

Exactly...private loan at 6% for dp and then my own equity and other credit for repairs.

So you don't think my banker will like this? Why not? I'm going to chat with him in the next few days, hopefully.

Thanks again...

Brian and Jon

Fantastic respones. I haven't yet digested all of the information given yet, but I certainly wanted to say thanks as soon as I could!

Brian...your question about paying a higher price using debt than I would otherwise is interesting...in my mind I'm just trying to put together my highest and best offer that is still a buy right according ot the principles I've learned on this site. If I've only got a certain amount of cash, my offer would stop at that amount, whereas the ability to get mortgages has given me more of an ability to leverage.

Jon... I'm glad you started with the "assumptions" of the ARV flipping rule. I was admittedly fuzzy about where the realtor commission fit in.

My repairs cost included vacant house insurance.

Like I said, I need to re-read your posts again and ask myself some more questions. The ROI discussion is one that I quite frankly don't pay enough attention to. I need to understand that more fully and your guys' posts are helping me to do so!

I realize I'm lucky to have a private loan at 6%... another hurdle, though, is that I can't use a "gift' loan like that as a dp unless I've had the $ in my account for more than 2 months (according to my banker).

Thanks again gentelmen!

I religiously use the ARV x 70% - repairs formula for any flip that I look into. Completed one last fall and made money. I 've only been looking at cash buys and under 100k houses up to this point.

Because of my wife and my w-2's, we're able to get mortgages now. I'm having trouble analyzing deals with this new wrinkle.

Example:

ARV 185K
Repairs 28K

185K x 70% - 28K = $101,500 Max offer

But when I play with the numbers more, I see that down payment, repairs and financing (holding and money costs) come out to just over 52K. So if I bought this house for 125K, I'd end up with a profit of:

185K - 55k (adjusted holding and money cost based on higher purchase price) - 100K (mortgage)- $11,100 (realtor) = $18,900

I'd be happy with almost 19k in profit. The ARV and the repairs are both conservative--ARV could be more based on comps and the repairs could be less. I'd be financing the whole thing through a private loan at 6%, an equity line and other credit.

I know there's mistakes in my reasoning and perhaps my math. Please point them out.

Thanks in advance!

Example

Yes, I think I'm heading that way, Scott. Thanks for the candid response.

I did think about a joint venture with the finder/ negotiator. I'd want to talk about that with a lawyer too, however.

Thanks, Justin!

I read a little about short sale fee structures on the other threads. Does it matter when or how the negotiator's fee (and in my case the finder's fee, too) is paid?

It's my understanding that to make the fee part of the closing would require a real estate license on the negotiator's part, but to pay a fee separate from the closing is unethical--frowned upon--illegal? I know I'm missing some things here.

Again-- I just want to make sure everything is above board on this.

Thanks!