I bought my first investment property.... - Posted by BB

Posted by Joe Kaiser on May 06, 2006 at 05:15:16:

BB,

What’s your hourly rate?

You did two things here . . . you bought and you fixed up. Break them
into two separate activities and calculate what you could have made
had you just flipped it as is, and divide that by how long it would likely
have taken. Now, you’ve got your hourly rate for dealmaking.

Do the same thing with the rehab part. Break it out, figure what profit
you’ll likely make as a result of your efforts, divide by your time spend
and calculate that rate. Don’t forget to first subtract out the profit you
would have made flipping, that’s not a part of the rehab profit, you
earned that with your dealmaking abilities.

Now, compare the two and let’s see where your EV (expected value)
really is.

Joe

I bought my first investment property… - Posted by BB

Posted by BB on May 04, 2006 at 20:11:02:

I paid $25K for this house and it needs EVERYTHING! I was able to get a ton of work on it done but pretty much ran out of money. I am self employed as an electrician and put work on hold to work on the investment property but now I’m putting the investment property on hold to earn some more money to fix it up. I paid cash for the house so it is free and clear. Do you think a bank would give me an equity line of credit on this house? Where else could I turn to get the cash so I can dump everything into this house to get it done and sold? I can’t afford to pay anyone to do the work for me because I don’t have the cash to pay them to do the work. Any helpful hints? Thanks!

Re: I bought my first investment property… - Posted by jason

Posted by jason on May 08, 2006 at 13:55:10:

Plan better next time!

Get a HELOC, as long as your credit is okay (620+) and you have some income, you could DEFINATELY get a HELOC for 2-3pts above prime.

Re: I bought my first investment property… - Posted by Chris in FL

Posted by Chris in FL on May 05, 2006 at 15:33:29:

BB,
How much money do you need to finish and sell? Are you willing to take on an equity partner (share some of the profit with someone in exchange for putting up the funds you need)? Email me privately and we can talk details if you are interested.
Otherwise, if the house is free and clear, it should be easy to get enough hard money to finish the job, or take Joe’s suggestion of selling it as is to someone that can afford to finish it. Best wishes!

I’ve been there… - Posted by Berno

Posted by Berno on May 05, 2006 at 09:53:20:

As far as the money goes, I have found a few banks in my area that will to a HELOC up to 80% of the tax valuation of a home. Not a lot of fees up front like a standard mortgage loan and you can pull out the money as you need it. You only pay interest on what you have borrowed and payments are interest only. (at least these are true on the couple I have done)

When it comes to deciding to pay for help or not, there are several things to consider. One main consideration is time vs money. Here in Iowa I find that it’s much easier to rent or sell a home in the spring through the summer. If I need help to get a house on the market, paying for help will get you out there sooner and may make a huge difference. Also, if colder months are coming up, I have to spend about $300 or so a month on a vacant house (heat, electric, water). Sometimes it’s better to get the help, get it done and either rent or sell before I have to start paying the high gas bills.

Good luck…I know how you feel!

-Berno

Re: I bought my first investment property… - Posted by IB (NJ)

Posted by IB (NJ) on May 05, 2006 at 08:08:30:

Find a partner to put up the rest of the money. Do a 50/50, 60/40 or whatever you two agree with.

But next time don’t go in a project without a PLAN.

Fail to plan and you’ll plan to fail.

Ib

Re: I bought my first investment property… - Posted by Killer Joe

Posted by Killer Joe on May 04, 2006 at 20:36:53:

BB,

Do the cheap cosmetics and sell it to the next guy. No brainer.

As counter-intuitive as this may seem, the real benefit over and above the money may just be the sale itself. A lot of folks I know don’t count the first one until AFTER it’s sold. Let’s face it…anybody can BUY one :slight_smile:

Unless you are strictly a buy and hold guy, the payday is usually on the sell side of the deal. You need to master that side of the equation as well. NOW is good time to take on those challanges imho. HTH

KJ

Re: I bought my first investment property… - Posted by kert

Posted by kert on May 04, 2006 at 20:21:58:

You can always sell it as an investors fixer upper and try to turn a profit that way…You may not make as much as you would if it was completed but an extra 10,000 could surely do you some justice to move onto the next deal…How much is the property worth if you were to complete it ?

Re: I bought my first investment property… - Posted by BB

Posted by BB on May 05, 2006 at 07:46:45:

I bought the house for $25K, I will have about $20K wrapped up in it when finished and I could sell it for about $85K.