All Forum Posts by: Timothy Lewman

Investment Info:

Single-family residence fix & flip investment in Holden.

Purchase price: $218,500
Cash invested: $38,775

Flip is almost done, down to punchlist items, 1st open house is the coming weekend!

What made you interested in investing in this type of deal?

Cosmetic flip, great town bordering on Worcester MA which is currently experiencing tremendous growth.

How did you find this deal and how did you negotiate it?

REO on the MLS, negotiated via my agent.

How did you finance this deal?

Hard money. Learned my 1st lesson as we got gouged on upfront fees. Already have a new lender for next project.

How did you add value to the deal?

New kitchen and 2 new baths. Master bath had 3/4 wall, we re-framed to completely close it off.

Lessons learned? Challenges?

Will let you know! Challenges was waiting for plumber and electrician, could have been done 2 weeks ago.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

Daniel Greenberger for Worcester and Middlesex counties.

@Ryan O'Leary yes it was a reo on the mls.

@Ryan O'Leary just started on my 1st house in Holden. 3 bed 2 bath 1520 sq ft. I was just there Sunday, it's almost done, another week or two and it will be listed. I partnered with my contractor, whose is doing a great job - on time, on budget. There's a lot of houses for sale in Holden now, thinking about dropping from original arv of $336 to $329.

@Ryan O'Leary oh I forgot - also check the buyers premium and add that to the purchase cost when running numbers. Its generally 5% of purchase but can vary.

@Ryan O'Leary I can only speak to your auction.com question. I've been bidding on these from time to time, they're tough as you bidding against investors and retail buyers who will live in them so prices usually get out of hand. You can set up an auto-bidder up to whatever your number is. You'll usually need hard money or private money, read the details of the particular auction to see what, if any, financing the seller will accept. Good luck.

@Hyunwoo Shin it's not the l/o contract that's the issue. Selling to someone hoping or, worst yet, knowing they will not be able to buy at the end if the term is predatory. Your intent in a l/o should be to get their finances in shape to joy at the end of the term. You can take their deposit money and pay for them into a credit counseling program so they will qualify. You need someone to teach you how to screen tenant buyers who are two or three years away from being able to quality for a traditional mortgage. You dont steal people's money when theres legit ways to make it. If you have to resort to theft to make money on a deal, it's not a deal, walk away.

@Ronny Versey don't improve a house your going to l/o. What's it worth in it's present condition? What are rents like in your area, will that cover your PITI? if there is equity in the house as is and it cash flows on a monthly basis you might have a deal for the three pay days.

@Tony Marcelle in order to sell half/part of a property you would have to do a condo conversion, buy both condos and then l/o the condo(s). It's entirely possible but is an extra wrinkle that costs money, maybe not for a 1st timer with cash flow issues. 1) Look for a better deal that will support itself and spin off free cash flow. 2) if you want to go deep on a house hack - What if your unit was also filled with roommates? Does that change the math? How long can you live with roommates before it gets old?

@Ashley Sliwa took a 401k loan for the 20% down and hard money for the rest plus rehab costs. My plan is to make the 401k loan payments, tax payments, personal payday all with the flip profits and recycle the rest of profits into the next flip. I will keep repeating this cycle until it stops working.

@Andrew Taylor ARV is pretty simple. Access to the MLS is key. Get an agent that will pull comps and add a 10% premium on top to reflect the rehabbed condition. So if a house comps out at $300,000, your sales price is $330,000. You can meet investor friendly agents at REIA meetings, see meetup.com. Or, depending on your budget, you can pay to get access to the MLS on MLSPIN.COM. Problem solved, now get out there and do it!