What to expect when you buy a Flip Property

Real Estate

July 20th, 2017

The day we bought our first investment property!

A lot goes into how one can buy an investment property-  My situation is a follows---  My wife, Ester, and I moved our retirement savings into our very own Solo 401k-Single K.  What that means is that "we" are our own administrators of our 401k.  Because we have an LLC and are owners of an official business this is possible.  You must have a business ID tax number to be eligible for a solo 401k-Single K.  As the "bosses" of our 401k, we are able to move our money into as many different areas of investment as possible through our company-Oppenheimer Funds.  Also, most importantly, we are able to take out loans up to 50% of our investment and pay ourselves the interest on the loan once per year!  100% of the interest goes right back into our 401k.  All of it.  Plus, we are able to write off the interest as a tax deduction on our year end taxes.  The terms available to pay the loan back is either 1-5 years or up to 15 years if the loan is to be used to purchase your personal property.  Because Ester and I will not be living in the property, we will be using a 5-year window to pay back the loan.  Our goal is to have the flip property sold within 3 months.

 

CLOSING DAY- Nerves are high.... The pressure to produce something of value to the market in such a way that produces substantial income for my family is daunting.  I am excited to rise to the occasion.  Wiring the funds is also nerve wracking, I have a better sense of empathy for my buyer clients when they have to wire funds for closing.  You hate to hear the stories of hackers taking peoples money and would so hate being one of the people in the story.... AFTER CLOSING- It was great going to the condo to stand inside and take in the scope and privilege it is to hold such opportunity.  Game planning has long been in the works and now it is time to start!  Although, I didn't actually start working on the condo the same day of closing.  I needed to work on some real estate things first and then I could get in and start on the condo.

 

DAY ONE-  Like I said the game plan was already in place, and now it's time to start tackling the many jobs.  Because the tools of the trade needed to be in one place I had to take a couple trips from my garage to the investment property to unload all of the tools I will need.  Luckily, the investment property is in my condo complex, making trips easy and short.  And,   I would also need to go to the Home Depot for the first of many times.  At  The Home Depot, I purchased painters tape (Frog tape-delicate)- I will review it later- Amazon said it was the best and so did the youtube video from Consumer Reports.  I also impulse bought a step ladder.  Ester will need to keep the step ladder we have at home so I thought it was needed.  I used it day one to remove all blinds over windows!  Worth the price on day one.  Also on day one- I decided to remove all cabinet fronts-remove the thermal foil and repaint them.  I labeled each cabinet front so I could easily replace them to the correct spot.   Time for bed, stay tuned!...