I will not lose
- Image via Wikipedia
I still haven’t found a buyer for the wholesale property yet. I’ve had about 5 buyers over there so far to take a look and I have two confirmed no’s. The other three say that they’re going to get back to me. They expressed some interest, but have to evaluate taking on this project amongst the others that they have going.
Yesterday, I cold-called about 10 different local Handymen after a Google search, to inquire if they also invested in Real Estate. I was surprised at how effective this was, it was a complete impulse action. Out of the 10 I found 3 new buyers that I added to my list. 2 said they would drive-by first and let me know if they were interested. And 1 said that he wanted to take a look inside either tomorrow or at the top of next week.
I have until 1/9 to back out of the contract via inspection contingency. However, I don’t plan on doing that at all. Once 1/9 passes, I’m locked in and will have until 2/9 to close.
My “plan B” was to close on it and still attempt to sell the thing wholesale if I couldn’t find a buyer before 2/9. But now, I’m reconsidering making “plan C” my “plan B”. The new “plan B” would be to close on the property and use the 203(k) HUD loan to close on the property and cover the rehab costs. With that loan all rehab and property costs can be rolled into the mortgage.
With the new “plan B”, I would have the rehab team that I’ve already selected perform the work. After two-months of work, the project will be complete. I’d move into the property. As, believe it or not, the mortgage payment all-inclusive of PITI would be less expensive than what I’m paying now for rent. I’d live in the property for a few months, then either Section-8 it or sell it. If I sell it, I would 1031 exchange it for something else so I’m not slaughtered by the capital-gains taxes (I’m not going to stay there for 2 years). Also, with the new “plan-B”, I stand to gain a bit extra via the new-homebuyer tax credit. The only thing is that it may take longer than the time I have to get that loan approved. That’s the main drawback. Other than that, I can’t see myself losing with this regardless of “plan-A” or “plan-B”.
I swear this has got to be the worst time to try and flip a property, especially your first. Nobody can compete with Jesus’ birthday…nobody.
- Peace Out
