All Forum Posts by: Stephen Cole

Nice! I really like your lessons learned during this flip.  Keep up the great work :)

I hear you, Michael Mazzella I may be newer at this, but I'm in it for the long haul, and I appreciate the advice of both you and Michael Borger Steve B. I was very conservative with the numbers, and padded the expected fix up costs by 20K and the other costs by another 15K or so. I honestly didn't think a profit margin of 85K was thin, but I'll defer to the experts, of course. Lots of lessons all around on his one, especially when dealing with a private money person that needs help with them definition of "cash" and "have it in hand". Lol I'll try to renegotiate with the bank and see if that results in a deal, but I'm never so emotionally invested that I'm not willing to walk away.

Thanks for the POF and all your help @Michael Mazzella. I look forward to working with you!

Good advice, thanks @Michael Borger. I guess I should have said I'm doing this as a smaller deal, since I'm starting out, not simply for the practice.  

Thanks, @Michael Mazzella! I realize that our ideas of a good deal differ greatly, but I'm just starting out and thought this would be a good deal to learn on, since the repairs would likely be very light and there should be a quick turnaround. I hope to be in your league someday!

I'll email your gmail account now to set up a meet to discuss it. 

I could really use some advice from the community!

I was working with a friend as a backer on deals here in Hawaii and put down some earnest money on a bank owned property deal I got for 500K. When it came time to put down the down payment of 25K and provide a Proof of Funds letter to the bank, only then did I find out that he didn't have all the cash, but only had about 385K in a line of credit. He says he can get the LOC extended and get the cash, but that will take a few days I'm guessing.

The deal is pretty good: I have it locked in at 500K for a property with an ARV of about 660K and the place needs very little rehab as far as I can tell. Its owner occupied, but it's over 1800 sf, has PV panels, and the roof and siding is in good condition. Likely just a light rehab inside and some landscaping required. I allowed 40K for repairs, and even with carrying costs for 4 months at hard money rates, the profit margin is over 60K.

Now I have to come up with 25K and the POF by 5 pm on Monday or the deal will be lost. I can do the 25K, but getting a POF for 500K on an offer that is supposed to be cash is what I'm concerned about. I plan on putting it in an LLC but haven't created he entity yet, so I'm still flexible on that part. Luckily, creating an entity in Hawaii can be done online in just a few minutes.

What do you recommend? Do you think I can find a lender that can help with the funds and POF by the deadline, or is it better to partner up with someone else?

I could see if the bank can push the deadline a bit on the POF, but I'm told that's a pretty strict deadline.

I could also let the deal go and try to re-bid after my original partner gets the cash together, but obviously that is not my plan A.

I appreciate any feedback!

Thank so for the feedback, everyone. When I said I wanted to leverage the marketing, I was just talking about the sound of the phrase. Using "Steve Buys Ugly Houses" should not be a trademark infringement. Regardless, I have decided not to use it, simply because it is not in line with my vision for my brand. 

Thanks, @Michael Mazzella. It was great seeing you again, too. You're right about the house I saw yesterday - although ratty, I saw the potential more than what it looked like now.  That's going to look great when it's done. I'll definitely re-think the company name I use for wholesaling / marketing for motivated sellers. 

Thanks.  @Michael Borger - Cool that you're doing deals in Kaneohe, too.  I agree that the word ugly will exclude a lot of houses with decent equity.  I'd like to chat sometime via email about your marketing/acquisition methods and numbers if you don't mind.  Looks like you're doing well here.

@Chris Mason - that makes total sense.  Thanks for your opinion.

Thanks for he reply. I have to admit a certain lack of pride in a company that calls others' houses "ugly". Must be the desire to stay positive that makes me not like a negative company name :)