All Forum Posts by: Yuriy Grytsulyak

@Nathan Gesner you might be right, i haven't thought of that. I'm a new to the REI and chasing my first deal. thanks for your input.

Back in early August I put a cash offer on a REO property with prof of funds and desired closing of September 30th(I also told my realtor that the date can be adjusted to whatever the seller wants). My offer was 52k on a house that was listed for 45k. The listing agent said they had a higher offer and accepted it, after reviewing my offer. I kept my eye on the property and it just closed on 10/6 for 50k. Is there anything I can do legally as I feel the deal was not a fair? Or is this a common practice in REI?

@Cal Dunagan thank you!

@Tom Shallcross, you right, i forgot about the house insurance. I'm in PA, will look into title cost at selling. City, state, and county fees? I have never heard of those, do they apply to every house or to REI only?

The loan that i'm looking at is for 12 months without early repayment penalty, so if the project gets delayed i'll just have to pay extra interest, no fees. 

You are probably right about 5%, i wanted to be on a bit conservative side. 

In this scenario i'll have a cash reserve for unexpected item.

Thank you for the feedback, i'll look for your calculator!

Good day all, could you take a look at my flip calculation below? I am working on my first deal and want to make sure that at least on paper it looks ok.

Purchase price 85k, rehab 50k, arv 190k. 

Hard money loan 55% of arv=104.5k. This loan will cover 100% of rehab, the rest will go towards the purchase of the house (104.5-50=54.5). The loan has the following fees 2% origination, $900 fees, 10% annual($870/month), $150 for each draw. So to get this loan i'll have to pay 

104.5*0.02+900+1500(assume 10 draws)=4.5k. Is 10 draws a reasonable number?

To buy this house: 54.5(loan)+30.5(out of pocket to get it to 85k)+3(out of pocket closing cost)

Now, once i close, i'd need to activate all utilities, which should run about $100/month as no one is living there.

I expect the rehab to take 4 months, in which period i'd pay interest of 4*870=3480. 

I expect to close on the house 2 months after the rehab is finished, so another 2 months of interest 2*870=1740

For the six months of this project I would also need to pay utilities 6*100=600 and taxes 4300(annual)/2=2150

And to sell I would need to pay a realtor fee of 6%, 190*0.06=11.4k

To sum it up

190k-104.5k(original loan)-33.5k(purchase)-11.4k(realtor fee)-3480-1740(interest for 4+2 months)-4.5k(loan origination+draws)-2150(prop taxes)-600(utilities) = 28.13k

Did i miss something? do the numbers make sense?

@Alan Blitz having money in order before the deal just bit me in the az. My offer for my fist REI has been accepted but because i did not have my private money in order the contract signing is being delayed and is in potential danger. However i think i have it under control. Could you recommend any investor friendly realtors in the area? what is your area of preference?

@Steve Babiak you are correct, the ideal house would not be in Norristown, and I am looking everywhere in surrounding areas. Norristown and Pottstown are the most affordable for new investors, which I am sure you are well aware of. I have tried to find good deals but haven't seen any. If you know a way get one, please share, I would really appreciate.

My partner and I have been looking for our first deal, here's what we are putting offer on today:

Twin, 3bed 1 bath, 1100sq ft, asking 85k, rehab 40-50, ARV 180-200, potential rent 1300-1400.

The plan is to buy the house using cash, then take HELOC for either this property or our own houses and use HELOC money for rehab. (is this a good idea?)

So here comes the tricky part, in the best case scenario we should be able to get all of our money back and have a small cash flow from BRRR, but stars must align for it, max rent, min rehab, max ARV... On the other hand, even with average numbers flip should produce at at least 20k+ in profit.

Ideally, we would like to keep properties and generate passive income, but with this one it doesn't seem to be the best option. 

What would more experienced investors do in this case?

thank you both!

Question to experienced rehabers, could you give a rough estimated to rehab this:

One story twin 3bed 1bath, build in 1960, 1100 sq ft. It is in livable condition but very outdated, everything will need to be updated along with basement and deck. Will need a new roof. 

I am chasing my first deal, any help will be very appreciated.

thanks