All Forum Posts by: De'Shawna Graham

also my calculations are arv×65%-estimated repairs. Example a property listed on auction starting bid is 162,000 estimated repairs of 15 to 30k. They arv is 220k. What would be your offer??

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Investors in the Fayetteville,NC area. how are you calculating you maximum allowable offer??? I've been in over a dozen situation where it's highest and best and end up offering 7 to 10 over their asking price and still not have an accepted offer. Is the market just very competitive and are other investors just being more flexible with their offer?

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Hello BP, Put in an offer on a place. Purchase price is 125k. but it's definitely in need of serious renovations. Comps in the area are for 160k. The as is value is more than likely 125k. The maximum offer I can do is 92,000 but the rejected the mess out of that. what's an fair offer. how can you find a property where you are not going over your maximum allowable offer? it seems like so many properties in this area are over priced. any tricks of the trade??

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Hello we bought our house under a short sale. it was listed for 110k. We bought it for 103k. it need 35k in repairs and is ARV is now worth 175. After putting in our offer our initial offer was declined and countered. the second offer we waited a couple of months for them to accept it because of investors also submitting offers. 3 months later we finally closed on the property. overall I think it was the wait that fizzled out the investors. of course this was short sale. The Seller was just weeks out of foreclosure.

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Hello @David Seroy,

Yes it seems like DHM, only funds 70% of the ARV. Which after figuring the cost doesn't seem to allow much to fund the rehab. Currently, Looking for a lender that will fund both renovation on the property and acquisition is my current dilemma. As most lender want you to have some experience, and this is our first flip. What I was figuring was that to get experience under our belt Do Hard Money, could be used to help fund, but quickly realizing that I'm gonna need to be able to fund the rehab too.

Originally posted by @David Seroy:

Similar thoughts to what everyone above mentioned, it is doubtful any legitimate lender will take a junior lien position. You should search for a lender that will fund both acquisition and renovation on the property. If you need additional funding on the current project, you could just finance DoHardMoney out of the deal. The fact that DoHardMoney will not loan renovation funds, is a pretty big flaw. Modern day HML's who work with real estate investors assess a property based on it's ARV, which allows borrowers to get capital for the entire project.

For example, if someone is purchasing a property for $100K, renovating it for $50K and expected ARV (After Repair Value) is $200K, then a lender may approve a loan for $150K. Even though that $150K is greater than the purchase price, the loan would be structured as a draw loan. Meaning, perhaps $100K is provided up-front upon purchase, then the remaining $50K stays with the lender in escrow and the borrower can draw on it as they complete repairs. So, maybe the borrower finishes demo does some framing, then draws $10K on that loan.

This way it allows borrowers to be fully capitalized, but protects the lender from over-committing capital until the property has progressed, therefore increased in value.

This is a very basic example, but it should get the point across. If the property is increasing in value, then a lender mostly will not care if they give more money into the property. Essentially, when you're flipping a property, you are quite literally and figuratively building equity into the property, which allows a lender to disburse additional funds.

Feel free to connect directly if you have any other questions. Hopefully that helps!

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Thanks @ Alexander Felice. Yes, making sure that we have enough working capital up front. Is the problem. So far, I'm in the process of working out contracts for potential investments, but it seems like we will almost need to completely free up our personal credit lines to cover cost of the rehab. I have talked to many different companies so far, and where they tend to stop me at the door is when I say it's our first flip. Then they stop listening. Not even looking at the numbers of our potential investment. I do see in Fayetteville they have a meeting with the local investors coming up. I will definitely try to be in attendance. Thank you for your help!

Originally posted by @Alexander Felice:

First, undercapitalization is the number one error new businesses make. So important to have enough capital upfront.

I also invest in Fayetteville and there is plenty of private money in that town, just gotta network and sell your idea. I've met and borrowed money from people I met here on BP in Fayetteville just by building relationships and helping out. It's possible

Build your network, build your track record. Also there are a TON of flippers in Fay and they are growing, lots of competition means you have to dig when starting out because you're out-experienced and out-funded.

Despite this, keep at it, you can do well in that town. Just takes some time maybe

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We are start up investment realty company wanting to flip homes in the Fayetteville area. I have gotten the initial investment capital from Do hard Money, Lending company. Just to get my foot in the door for our first flip. The more challenging part is funding the working capital for the rehab. What are some of the best practices for this as a start up company. Are their some private money lenders that might take a chance and be 2nd on a lien? Any suggestions?

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I'm looking for referrals for General Contractors in the Fayetteville, Area for rehabs deals that I am currently working. We are beginners to rehabs and investment properties, but have had experience working with a general contractor working on renovations to our home. If you know someone who is interested please reach out.

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All Forum Posts by: De'Shawna Graham

De'Shawna Graham has started 4 posts and replied 8 times.

Post: Maximum Allowable Offer

Post: Maximum Allowable Offer

Post: how to get them to lower the purchase price.

Post: Buy Foreclosure or REO as Primary house

Post: What are some of the best ways to find Private Lenders in the NC?

Post: What are some of the best ways to find Private Lenders in the NC?

Post: What are some of the best ways to find Private Lenders in the NC?

Post: I'm looking for Contractors in the Fayetteville, NC area