All Forum Posts by: Stephanie Simmons

I am about 2 weeks away from listing my first flip for sale.  It took me 4 months to obtain it - so I am starting now to look at properties (I am investing in a different area).  

I am also looking to refinance my personal residence (and recently came off a 6 week 40% pay-cut at work).  I am reluctant to get a pre-approval on a traditional loan - don't want to mess up the refinance and I more than likely I will have that other property sold; and have cash for this new purchase.

With that said, I want to start looking and placing offers on houses next week that are listed (REOs, etc.) and they won't look at an offer without proof of funds (if there isn't a financing contingency) or a pre-approval with a financing contingency.  

Do hard money lenders provide a pre-approval letter that you can use for this purpose?

@Colby Hager

I just sent my first DMM - targeting absentee owners that are delinquent on their property taxes in my county.  About 160 postcards.  I went with an "altruistic" message - we invest to keep communities growing and to provide safe and secure housing to tenants and new homeowners.  IDK - if that will work; but there seemed to me a lot of estates owning these properties & out of state owners.  You mentioned you had written some articles - where are those located?

@Annchen Knodt

Well I grabbed a list of absentee owners who are delinquent on their property taxes in my target county.  I am sending out a mailer to about 160 owners that will be delivered over the next 3 weeks.  It cost me less than a dollar a mailer - so not a lot of $$ to attempt it I guess. 

Cool thing is that I am a licensed agent so my MLS fees pay for the tool. I'm good on the list - I'm looking for any tips on wording of the postcard - should I create a website so the prospect can have some additional interaction to encourage them to reach out? Any ideas on typical response rate?

@George Ozioko. My local investor association is holding meetings virtually. Many have Facebook pages.

I started investing while traveling 10-12 nights a month. My partner did too. Proactive scheduling with contractors is key. Also if you can find a handyman that can do a lot of the little stuff and you check in on quality of work is super helpful.

NEVER pay up anything front. I will make a progress payment for material delivery. Or will pay for work performed (by 5pm on Friday) - that gets a ton of work done and you can run by and check the quality and progress once a week. I did this early on with a lock box for an electrician, plumbers, AC, and painters. Once finishes started going in I made sure myself or my partner was on site to supervise.

COViD has cancelled our work travel for the foreseeable future which was kinda fortunate

@Reginald A. Shelby II

Yes - but I do make decisions on the reasonably certain worst case scenario. Such things are - unseen repairs - vacancies - tenants that don’t pay. Then figure out how you are going to proactively protect your self (really good inspection, additional cash on hand, round up in repairs, get solid contractor quotes,strict tenant screens guidelines, treat tenants well so they want to stay, etc).

If you never invest - you will never get a return. Too conservative would be that...

@David Martin

They will want to see an account with those dollars in there - but if you don't want to pull the dollars on the HELOC until you close - I'd call the listing agent and explain that to them and then they would probably accept something proving you have the available credit & then over communicate you will not have a financing contingency.

Historically I have purchased REOs; but with inventory being so low all recent listed REOs have been listed about 10% above market value. For example - last year I bought a 3/2 1600 sq foot complete gut ($50k rehab) for $168k with an ARV of $250k. And I was putting in about 5 offers a week

Today in a lower property value zip (rural) this same property size 3/2 are at $200k with similar rehab costs but ARV is $215-$220k.

I am thinking about targeting absent owners that have delinquent taxes and doing a mail campaign.

Does this work? Do I need a website? Any advice?

@Sean Goodson

I think you need to look at your short term and long term goals. If you want to make $200k a year flipping - most people don’t have $1m in cash so they use their cash for the remodel and down payment and finance the property so they can do more. They put up 30-45% of property value and still make a profit. It’s called velocity of money.

My personal risk tolerance - I did my first flip cash. I tied up $200k during the whole project. I could have done 2-3 projects during the same time for the same capital investment had I leveraged debt; but it was my first one and I didn’t want the time pressure (payments). I would have made 1.5-2.7 times as much cash (financing has costs) during the same time if I had used financing.

@Katie Miller

Don’t over pay. You make or lose money on the purchase.