All Forum Posts by: Burt L.

I appreciate the replies. An initial property would have an ARV in the 150K range, and winter sales are about half of summer sales (about 1800 vs. 3500 closings per month winter/summer).

There is certainly an economic cost to not having a deal, though I can look forward to wider margins in the winter and prefer winter work as Denver winters are relatively mild.

Its good to know that spring purchases are tighter; I may be able to make a November/December purchase and be back in the buying market before the end of February.

I don't want to lose momentum as doing a first flip is a large hurdle and I see many wan-a-bees at investor club meetings who never get a business off the ground and there is alot to be said for continuing action.

It may be that I need to concentrate on learning many of the neighborhoods so I can recognize a deal more quickly and make offers faster. Maintaining momemtum is important, and though I don't want to wait for winter it may be wiser.

I am looking to begin an initial flip property, and as its early August I wonder if I should wait and make the purchase this winter to be put on the market in early spring.

In talking to local rehabbers I've heard some of the following conflicting comments:

1. Rehabs need to be back on the market no later than October 15th.
2. Do flips in the first and second quarters and buy and holds in the third and fourth quarters.
3. The market is all year long - understandably said by a wholesaler.
4. Take a large margin deal whenever you can find it.
5. Make your rehab-house purchases while others are busy purchasing Christmas gifts.

There is a winter season in Denver, with fewer sales as in most locales. If I could find a great deal in a strong neighborhood I would be less concerned, but what I see are usually tighter margin deals making 15-20K as wholesale prices have risen.

Is the end of summer a more difficult time to do an initial filp project? I would be using borrowed funds.

I have a Roth IRA that has been in place over five years, so the gains and the principal can be withdrawn without tax consequences -other than reporting. The account isn't large enough to finance a flip itself, but the funds can be used to obtain a soft-money loan, and I will have 20% in both the purchase price and 20% of the rehab costs.

My understanding is that if its in an IRA, I must do a non-recourse loan of 40-50% down and can't be involved in the rehab at all. The financed part of the deal is taxable anyway. Other than being a wholesaler and using a roth for earnest money, it doesn't look like I can use the Roth as it isn't of "critcal mass" to do an entire deal.

As this is my source of funds to do an initial flip deal and the distribution is not a taxable event, I don't see a way around the distribution. I can also take the money out for up to 60 days and return what wasn't used once every rolling twelve months. Of course, few flips are turned in 60 days, but the funds could be helpful in qualifying for a soft money loan if nothing else.

I read a few times that smaller IRA accounts aren't so helpful for real estate investing in general. What might I be overlooking, before pulling the 60 day trigger? Seems a little like starting the 45 day identification period on a 1031 without a target property, though. However. lenders do want to see your money seasoned on a statement or two and the funds just don't seem to be of use in an IRA.

I went with Your Castle Real Estate - which costs more in monthly fees, but better support for investors, in my opinion.

I went to a presentation tonite by a HML in denver who with rates of 10.5-11%, 2-3 points, but a LTV of 60%. The length was 30 months or five years. He has investors who get the interest and he gets the points.Inestors who do their own work are even better as they don't get caught up in legal delays over contractor skirmishes. Residential only, and he prefers investors to owner occs, but says there are lot of self employed out there with credit scores over 700 but can't get loans anyway; thats not really big news. He prefers to lend in his own backyard of colorado.

He also mentioned to get references from others who have closed loans with a particular HML, as some are less capable, etc. Other presentations I've been to usually have rates of 15%, but a higher LTV.

A long weekend with my face inside a ceiling; the floor joists are 2 X 16, on 24" centers. The contortioning was from working between joists two rows over from the ceiling opening - at times - to keep cuts into the finished ceiling to a minimum.

I haven't yet applied drywall compound to the seams where the openings have been re-sheetrocked, but much of what was predicted seems to have borne out.

I do hear much less of the low frequency noise above, such as dogs eating dog chow etc. but there doesn't seem to be much difference in the sound of footsteps or dogsteps. I knew it was chancy, but had little to lose by trying as resigning the ceiling struture of a room I inhabit is a difficult stretch now.

On to the next step - so to speak. thanks for the help.

I was able to start installing insulation in the ceiling today, by cutting some 4' by 4' openings. I found that I can work two floor joists over from the openings, with some serious contortioning. With 16" of height to work with, I went with R-30, which is 10.5" inches tall. Even lucked into some 24" wide batts at Lowes.

Hope to make some progress in the sound deadening; there are other things I may have preferred to do this weekend besides manuver insulation into place by cutting into a finished ceiling, but this is important.

Thanks for the suggestions

I appreciate the replies and the additional research done in distinguishing between low and high frequency noise. My primary issue is the low frequency found of footsteps on a tiled kitchen floor above.

Due to the direction the joists run, it would be relatively simple to remove just two sheets of sheetrock that run lenth of the room, in the center of the room, and slide in R-19 that is 9 inches tall into the space thats 16" above the sheetrock. I realize I'm addressing the wrong frequency, but then I can "work from the top down" by addind sound-proofing below it, if its proves unsuccessful by itself.

I'll try to locate some R-19 for 24" centers tomorrow morning as the local Home depot didn't have it on the shelf. As I'm living in the unit, refinishing an entire ceiling and living in the dust again isn't so appealing, a second time. I could then add the sound prrofing below, which would be ugly, but the owner avoids major expense and I avoid dust around computers, and having to sell the owner on another major remodel.

Maybe the combination will be successful. I'd use sound -reducing earmuffs over my earplugs if I could sleep on a pillow with earmuffs, but I"ve already tried that.

Thanks for the insight.

Thanks for the reply - yes, the sheetrock is attached directly to the floor joists. It sounds as though even if there had been fiberglass insulation placed in the 16" tall space between the sheetrock and the tiled kitchen floor, it would have made little to no difference. The floor joists are on 24" centers.

Short of removing a finished ceiling, buidling a new joist system and refinishing the ceiling again - it seems that I"ve little to lose by getting sheets of sound deadener and attaching it to the ceiling to see if it makes a difference. I can add a layer of the polystyrene below that, next. I don't know what any health effects might be of sleeping below polystyrene. It also seems this has little to do with "R" value.

I learned to sleep with ear plugs some years ago during my dormitory years, and haven't slept without them since. Some people think that makes me a little odd, but sleep is more important.

Maybe I can find some thicker sound deadener besides that offered at Home Depot at $10 per sheet. I will need eight sheets.

Great to know that opening the ceiling just to install fiberglass insulation - would likely have been a waste of time and resources. That would have been very frustrating. Think I'll try adding sound deadener to the ceiling before redesigning the floor joists as this stage of testing will be so easy. A subsequent tenant will have the same problem, and I"m open to other suggestions too.

To help absorb the carrying costs of financing flip properties, I agreed to remodel an unfinished basement in exchange for a lower-than-market rent for myself. Now that its complete, I see how badly the area under the kitchens tiled floor needs to be insulated from noise. The owner now works a night job, and this has created late-night noise problems as the basement bedroom is directly below the kitchen.

There is a 16" space above the basement ceilings sheetrock that could be filled with fiberglass insulation if a few sheets of rock were removed. Understandably, the owner doesn't favor opening up finished sheetrock if its not necessary.

In looking at Home Depot, I see the R-30 fiberglass insulation (9 inches thick) that could go above the sheetrock if a couple of sheets were removed. I also saw 2" thick polystyrene foam insuation in 4 by 8 sheets that could be attached to the ceiling easily and wouldn't look pretty but might function if its sound deadening qualites are effective.

I also saw 2" thick Tuff-R commercial insulation with an R value of 6.5 that has foil backing on both sides, and Sound Choice Sound Deadener that is about 3/4" thick and looks like a fiberboard.

From a quick and dirty viewpoint, the Polystyrene is white in color and could be attached quickly. This general problem will persist with a future tenant, but the owner doesn't understand the problem so much as he is able to sleep soundly on the upstairs level. I also sleep with earplugs, but guess must be a lighter sleeper.

The R values don't mean so much in a sound deadening situation; What might my best course of action be in this situation? It may come down to both fiberglass insulation and the sound deadener attached to the bedroom ceiling but I don't know the sound qualities of polystrene though it could be attached quickly.

Is polystyrene an effective sound deadener? Maybe I could put it over a layer of the Sound Choice Sound Deadener. Being tired each day is proving tough on making investment decisions.