First of all my name is Sean Mathes and I live in northern Colorado and I am new to this board. I am trying to get into REI and have already begun by purchasing my first flip. I started the process before I had read anything on the boards. I thought that I was well equiped with a finance degree and sales background but as they say there is no substitute for experience. Man do I feel like I barely know anything. I will start by explaining my finacial situation.
One year ago I purchased a home that I am currently living in. I don’t like the property at all but unfortunately I am stuck here for another year as I have a pre-payment penalty on my mortgage for the first two years. I want to rent this property for another year until I can sell it in another year.
I am working on my first investment property right now which is a HUD home in Longmont CO. They were asking 126,500 and my realtor advised me that we should offer $126,500 and ask for seller concessions of $3,800. I feel somewhat now that I probably could have gotten it for less but my realtor convinced me that it was a “great deal”. It needs about 5k worth of repairs and I am pretty sure that the ARV will be around 170k. I found 10 other properties in the area sold in the last two years in that area and none were less than 170k.
I have had so many problems I don’t even know where to begin. I started this process near the beginning of November and probably won’t close for two more weeks. I am currently on my third lender, third appraisal, one inspection, second realtor, lease contract for a renter for my current home, estimates for repairs, and am so fed up with all of the problems.
This is a fixer up but only needs cosmetic repair. Some missing carpet, paint, and there was a small amount of mold only on the interior walls but that has been mitigated.
Most recently the lender has asked me to escrow for all repairs, they want one and a half times the amount of the repairs, and also today I found out they want another $300 fee just to put this in escrow.
I am doing an 80/15/5 with citigroup. I am just getting really nervous as it seems that absolutely everything that could go wrong has gone wrong. I know that there can’t be any emotion but at a point you just start to have a bad feeling.
I currently work full time in corporate sales I am making 60k salary but with all of my bills after buying this property I will be at about 50% debt to income.
My credit is 750. Not exactly sure what I am asking but I would really appreciate any input on my situation and whether or not I should proceed with this purchase. I just feel that I have put so much time into this and a fair amount of money with earnest money, extensions, appraisals, inspections I feel that I should stick it out.
I APOLOGIZE FOR THE LENGTH OF MY POST