All Forum Posts by: Tae C.

@Garrett Thurman

As several others have mentioned, I think your expectation of the no down payment is unrealistic.  You’re going to be hard pressed to find a legitimate, reputable hard money lender that’s not going to require at least 10% down of purchase price, if not purchase price + rehab, especially with no experience on your resume. That’s just the reality. There’s a reason why you aren’t finding any well documented lenders who truly offer $0 down. So you say you would be more than happy to use hard money as long as you can find a good one - there are a lot of good ones out there, but not if your main qualification is that they do not require a down payment of some kind...and again, usually at LEAST 10% of purchase, probably more, for your experience level. 

@Levi Graziano

Levi, try Mountain Community Bank.  I know there’s a big branch right off Cedar Bluff.  I have an investor friend who was telling me they’ll do 15-20% down on investment properties on a long term mortgage.  I haven’t verified myself, but it’s worth looking into.

@Tom Gimer Title company is resembling crickets as of now, I’ve already tried contacting them about the issue.

@Mark Jones @Ross Denman I see you guys are local to the area.  You guys both seem to be saying that, from your first hand experience, the city is relatively willing to work with someone who makes it clear that it’s their goal to be as compliant as possible.  I have reached out as of earlier today directly to the actual inspector who wrote up this violation, as the paperwork says to do, to communicate my desire to do whatever is necessary to resolve the things mentioned in this violation.  Hopefully I receive a favorable response and some specific direction to get this thing resolved.  

@Mike D'Arrigo @Charlie DiLisio The city had not filed a lien at the time of purchase...so it makes sense I guess that it did not show up on the title search.   

@Jim Adrian The contractor was responsible for pulling all permits as clearly stated in our contract.  He did not follow through on this, and I am the ignorant one who just realized this reality now, already several months in.  I am trying to get this addressed as we speak.  

@Jon Holdman and all - so I guess one of the key pieces of due diligence for future reference: check the county/city records up front on any property I am looking into for any kind of code violations placed against it?  Such a simple thing...yet a total rookie move on my part to just assume that a title search was going to find any and all obstructions.  Lesson learned.  Also, I have to be a lot more hands on it seems with the contractor (I had hired a project manager to oversee the GC, I assumed they would be managing this type of thing as part of their services) to ensure proper permits are pulled.  Lesson learned.  And finally: Assume nothing.  Get clarity for things that seem to be even the most obvious of assumptions.  Another lesson learned.  Thank you all for your input, tremendously helpful!

@Jon Holdman

I don’t know if “brave man” is the right label - like I said, naive and overly-ambitious was probably more accurate in this case.  Still have a ton to learn, that is for sure.  But again, having said that, it’s been a very educational past five months so there’s a silver lining there.  My other rehab seems to be heading in a better direction, so there’s that as well.  

I didn’t realize the type of mess a “simple” code violation letter could imply.  I think there’s about a grand worth of fines racked up on it that I’ll have to pay at this point, plus whatever other actions I have to take like you mentioned in your initial post.  I’ll do whatever I can to get this taken care of the right way and move forward.  

@Jon Holdman

Some context: I am brand new to flipping. This project is one of two simultaneous projects i decided to take on as my first two flips - in two different states...and neither are in the state I live in.  Whoops. I thought I had done plenty of due diligence, but have quickly learned throughout this process that I didn’t do enough of it. I thought I had the right teams in place to do it well, but it has not quite turned out like I envisioned.  Looking back on it, I was naive and overly-ambitious.  So...on this project specifically, it’s been a bit of a mess that will ultimately result in taking a not so insignificant financial loss. It’s been quite a time (and cost) of education for me these past 5 months. Will be that much more ready for my next round of projects. 

Re: permits - again, in my ignorance, I assumed the proper permits were being pulled by the contractor but just recently discovered only one of several needed has been pulled, so I am in process of getting this addressed as we speak.  I always want to be above board as much as I can.  My own inexperience ultimately led me into this situation, so just trying to learn as I go while doing it as right as I can. Hence asking my original questions. 

The code violation letter listed out pretty plainly the exact items that needed fixing, so that’s my starting point. I will be working to get this resolved properly - thank you for the in-depth guidance. 

@Charlie DiLisio

In this case, are you saying you can simply pay the fee once you meet with the building dept (whether it’s the full or reduced amount) and it is cleared up once and for all?  

This property is in Indianapolis if there is anyone local that would be able to speak into Charlie’s suggestion. I am also out of state, so a bit difficult to setup a meeting with the building dept without some advanced planning...but of course doable if needed. 

Hello all,

I have had a property since August 2017 that’s been undergoing a slow rehab.  A month or so ago, I received a letter in the mail from the county informing me that there is a code violation for all sorts of repairs that were needed.  Well yeah, that’s obvious as it was a very distressed property.  Here’s the frustrating part.  This violation has apparently existed on the property since January 2017.  There had been two previous owners, including the individual that basically wholesaled it to me (he did take title on it for a few days), since the time that the code violation was enforced.  As a new flipper, just curious of a couple things:

• do title searches not detect code violations such as this?
• Is this solely on me to fix at this juncture?
• The reality is, my rehab should take care of all the items mentioned - but regardless, what exactly do I have to do to get the violation resolved?

@Andrew Kerr

Ok gotcha, I didn't realize you were saying you guys had held as rentals for a little while.  I was assuming it was just a straight flip, so I was a bit confused on that 10-14% return you were talking about.  So if you got financing, I would assume there were holding costs with the interest payments as well as utilities, etc. - were you paying those every month?  And if so, did you recuperate those costs before the profit split on the back end?

@Stefano Grottoli

Who would be actually managing the rehab?  Who would find and bring the deal?  I think those types of role definitions would play a factor in the profit split.

Andrew, so to clarify on your partnership example:  Are you saying you gave them 10-14% annualized interest on their money monthly, plus a percentage of the net profit on the back end sale?  What were some of those numbers like on your side and your partners’ side in an actual situation?