All Forum Posts by: Steve Wilcox

Will thanks for the advice from a flipper. I am certainly not running or trying to run a 2 guys in a pickup operation, and due to very high cost of land and density in my area new construction is generally not feasible, unless you are doing a major commercial development.
Now back to the point at hand. I provided the Hud1 and generalized itemized list of repairs signed to be done to the best of my knowledge. Let me also tell all the other posters we are not making a crazy profit, the spread is going to be less than 20% after adjusting the appraisal, and feel that we probably could have gotten the appraisal number up with a formal reappraisal and value dispute but we decided to move forward with the sale rather than waste additional time and consider it a learning expense for making a house too nice.

Thanks again to all posters for advice and sharing experinces

Bryan and Jon thanks for the advice, I think that I will tell the bank to prove they have the funds set aside in escrow for closing (supposed to now be 1/03), tell them I will not give them anything and that if they cant close I will cancel the contract, hopefully the buyers (retail buyers) will put some pressure on their people to get it done, or make them switch lenders. I am concerned the bank really just wants to try and beat down the price even further than what it has already appraised for. If they wont proceed I plan to tell the buyers they must switch lenders, or they can keep looking elsewhere.

I am in the process of trying to close on the sale of a property, and the bank has been a huge hassle. The home was under contract for $155 per sq-ft which is totally in line with all comps and lower than some provided buy the appraiser, but since the house was larger than most in the area they demanded we lower our price by over 20K (original contract price was 267). We agreed to simply change the contract price to the appraised amount because most of my cash is tied up in the project and I want to keep rolling rather than fight over a few dollars.
Now on the scheduled closing date the ban says they cant close until I give them my HUD1 statement as well as a list of all repairs and upgrades I made to the property. We have owned the property for over 6 months, so no 90 day issues.

Permits may not have been filled for the work and I do not want to get into issues.

We agreed to adjust our price to the appraised amount and it has been over 90 days, can the bank ask to see any of this? What is my best option, I just want to close this deal so I can move on, but also dont want to open a can of worms trying to rush to close.

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*No applications will be accepted from strip clubs or real estate investors.

Wow. Now we’re lumped in there with the poor guy that wants to buy a new stripper pole. And if you need a new stripper pole, that’s a purchase you shouldn’t delay.

This is a concern of mine setting up an LLC for flipping homes. I want to ensure maximum access to credit, and on the NJ filing form they specifically ask for business purpose. I have thought about filing as "Real Estate Investment" however i think this will scare away creditors. I am concerned about sounding like a contractor as I will not be.

Any ideas or suggestions that will not misrepresent the business as something it is not, but also not waive a red flag in front of a bull.

Are there any flipping credibility increasing business purposes? The ultimate plan calls for using the profits to purchase commercial, but the short term plan is to flip to generate capital.

if you have BX or armor clad wiring than its a very simple fix. You can buy self grounding outlets, which have a little copper (maybe brass not sure) piece on the base of the recepticale where you screw it to the box. The metal sheathing around the wire will serve as the ground wire going back to the panel
If you are doing this yourself go buy the little tester and plug it in after to make sure your work is correct.

I think the simplest way to set up the $ value of the actual work you are doing? How much would it cost if you had to pay someone else to do the work? What value does the business gain having you do the work vs paying a contractor or laborer

Also keep in mind if you have a more experienced partner with deeper pockets who wants to work with you and help you get started, are there things he brings to the table that you might not be? Do you want to work with him on future deals, or is this just a one time shot?

If you are using an FHA loan you have to be an owner occupant. I would not use your 1x FHA for a rental, as you will either have to move to the hood, or lie to your bank and hope it doesn't create and issue.
If you need an FHA to generate cash flow, then maybe you should look at more active ways to see return from your money such as buy rehab and resale, or cash out refi You could look at 203k loan if you are going to be owner occupant. If you don't have 2 years of landlord experience than your next mortgage will count this one against your income even if you have positive cash flow until you have 2 years of tax returns showing yourself as the landlord (also not possible if you are supposed to be occupying it).

if you do not have 2 years of experience as a land lord than you can only qualify for a residential loan based on your own indivual income, you can not use the income from the property to help qualify. That means you must be able to carry the debt from your own home, and the investment property at about 40% of your gross income or less.
You can not get FHA for non owner occupied

I am also looking at purchasing multi units in NJ. I find that ironbound area is far too expensive to meet my goals for return. I also do not want to be in the south ward, irvington, or east orange where you might need a bullet proof vest to go out to the property.
Another question would be are you going to manage yourself or hire a management company?
If hiring does anyone have any experience working with NJ management companies, how are the fees, and do they change based on the area?
Newark as a city is really coming around and unfortunately in my searches the price of the inventory reflects that

depends on the size of the bath, and the level you plan to rehab it to. I typically do a full bath for about 5k in a home that will retail for 250-300k, using my guys to do the work.
Are you going to be doing any of the work yourself? Do you have connections to good workers?
I find by knowing what my guys want to make per day of work, and then by understanding what they will actually be doing and how long it should take I can control the price.

Dont skimp on the materials such as the tile since there is generally less than 100 sq-ft of tile in the whole bath and tub surround. Also buy a really nice shower curtain and a decent sink faucet