A BiggerPockets Partnership

37 Replies

It's not a success story yet, but I wanted to post about a great partnership that has evolved from BiggerPockets relationships...

As some of you know, Marty Boardman and I presented together at the BP Summit back in the Spring, and that was actually the first time we officially met (along with Marty's business partner, Manny). The three of us hit it off quickly and we knew there would eventually be an opportunity to work together. That opportunity actually came pretty quickly.

Around that time, inventory was drying up both in their market (Phoenix) and my market (Atlanta). We decided to do some research, pick a new market and explore a flipping partnership in that new market. After a few discussions with Steve Cook (a well-respected RE analyst who gave a great presentation at the Summit), we decided to take a look at Milwaukee.

During our first investigative trip up to Milwaukee, we met up with two other BP members that we'd never met in person -- James Gefke and Emilio Ramirez. On that first trip, Marty and I made several offers,including an offer on a property in the west suburbs of Milwaukee. After several months of negotiation with the bank, due diligence issues and closing fiascos, we finally closed on that property two days ago.

I'm in Milwaukee this week working with James and Emilio to put together a detailed scope of work, make design decisions, line up contractors and get the permit process rolling. James will likely be our Project Manager for this project (he just finished a great flip in downtown Milwaukee) and Emilio will be helping us with contractor relationships and perhaps doing some of our rehab work.

This week has been a huge challenge for me -- it's been a couple years since I've had to think about building contractor crews from scratch, learning the permitting laws, finding a GC and putting together new processes for getting work done. Add to it the fact that there are a whole set of renovation issues up here in the great white north we're not used to, the fact that Marty, Manny and my trips will be relatively short (we both have little kids and other family/work responsibilities at home), and the fact that this will be a very large and complex renovation, and what we have is a ridiculous learning curve that is a GREAT REMINDER for what new investors go through every single day.

While I'm not always enjoying the pressure and challenges that are going along with the start of tbis project, it really allows me (forces me!) to put myself in the shoes of many of the people who read my blog and my posts here on BP. Hopefully, it will help me better empathize and gear my advice towards the real struggles new investors face. In addition, it's made me very reliant on all the great advice and information here on BP -- I've spent the past couple nights scouring old posts about investing out-of-state, trying to dig up information on some specifics of our rehabs that I'm not accustomed to, and trying to find resources/contacts for those up here who may be able to help us.

I've learned -- and re-learned -- more in the past week than I have in the past 2 years. It's refreshing and terrifying... :)

Anyway, I don't expect this deal will be a home run (that was never the goal), but it should allow us to get our feet wet in this new market, learn the intricacies of investing in a place with a different climate, different types of houses with different types of problems, and start to build a team so that if we decide to do more projects in this area, we'll be better prepared. That said, hopefully it will at least be somewhat profitable as well.

In terms of numbers, we purchased the house for $151,000, will be putting about $75,000 into it, and will hopefully resell it for at least $275K. At times this week, it's looked like we'd be $10K under budget and at other times, it's looked like we'd be over by $15K. And we haven't even started demo yet...a good reminder that rehab estimation is hard!!! :)

Anyway, I'll post updates as we move forward (the bulk of the project won't start for a few weeks, as our foundation repair company is pretty booked and can't get us on the schedule until the first week in August). And if anyone is interested in pictures, budget breakdown or more preliminary details, feel free to check out my blog (it's House #36, "The WI-1 House").

In the meantime, thanks to BP for helping us put this opportunity together, and I look forward to getting a chance to work with Marty, Manny, James, and Emilio!

Awesome, love to hear success stories. Even better a partnership with others here on Bigger Pockets.

Can't help but think there could be many more success stories just like this that can be built from relationships here.

Originally posted by Jenkins Ramon:
I hope your using American Foundation

They handle a lot of work for Milwaukee County

Not familiar with American Foundation...will do some research...thanks!

For reference, this property is actually in Waukesha County...

FYI ,, they serve all of Wisconsin (just in case ,, need )

Waukesha only 8 minutes away from most part of Milwaukee County

Waukesha
- known for Tech college and excellent business community -

next to Brookfield ( nice community also )

Congrats to you and Marty J. (and your BP crew in that area). Great partnerships have formed on this site and I am one of those examples as well.

Quick question, your numbers posted above, are they correct or any typos? Reason I ask, it looks like you are all-in atr about 82% of your exit value which is much higher than I have ever seen you do in GA.

Originally posted by Will Barnard:

Quick question, your numbers posted above, are they correct or any typos? Reason I ask, it looks like you are all-in atr about 82% of your exit value which is much higher than I have ever seen you do in GA.

The margins on this one are smaller than my typical deal, for certain. That said, I think a $300K exit is reasonable, though I like to be conservative, so I prefer to use $275K for my assumptions and analysis.

I see, worst case scenarios are good to look at, it is just not often that investors post them (kudos to you). At $300k, you have a deal I would do all day long and I am quite sure you will hit it.
Let us know how this turns out. Good luck to both of you Jason.

Will

I don't often venture north of the border on my deals; however, I'm just south of that area in IL. I'm dead center between Milwaukee and Chicago. So on the next trip out, give me a call and we'll all do dinner.

-Steven the Tax Guy

@J Scott thats awesome on your expantion. If you every want to branch out to the Charlotte, NC area let me know. I just got my Real Estate license and currently have one flip under way (6 previous flips)and purchased two rentals with proceeds from a previous flip. I locate more deals than I have capital for. Also I am very conservative and have not purchased any properties that did not have a at least minium a $25,000 net profit (before taxes)

J Scott Good to hear stories of BP members getting to know each other and work together.

@Uwe S. sometimes it's the timing, and you just need to repost and try again, and get it back on the front of the forum! Ask questions of investors and try to find out if there's interst in partnerships, what types, what types of properties, what areas, etc. I checked that group out 4 months ago, and posted to revive the group, and then never saw anything from the group posted again. If you are the moderator, and it's important to you, post threads sometimes to get it out there. Contact the people on there and see if they still have interest etc.

Really looking forward to hearing about your adventures. You guys have a lot of courage: new partnership, new area, new workers, wow, sounds like lots of fun.

Applying your skills will make this easier than when you first started so you will be rewarded for your experience. Good luck!

Karen M.,
Thank you for the reply, yes this group is very ineffective. I tried to push this group but in most scenarios was no interest.
Now many of the members inactive and only the group members can read the group topics, so it come to nothing I guess.
Looks like team play is not prefered.

-Uwe

@Uwe S. Don't get discouraged. I don't think it's so much that "team play" is not preferred, but more that real estate investments are not inexpensive to get into, and most investors are looking at the market, the economy, etc. and making decisions as to where they want to invest, what types of properties present the safest options, etc. It's a big decision to invest money right now, and finding people wanting to partner is going to be a very small percentage of investors. Those few investors happening to be on here and searching for a post for joint venture partners are slim. That's why in order to get something like that group going, you have to post threads over a period of time, and try to get some response to those threads, and hopefully keep the group alive.

Maybe you could post more specifics on the type of property you'd like to invest in, what would your part of the partnership be, what area are you interested in, etc.

We do commerical development, and I have recently been considering different options to fund future projects, and posted asking if anyone had ever joint ventured, how it was structured, etc. There were no responses. However I think if I had a specific project with more details, it would at least generate comments if not interest. That's just how it goes sometimes! Don't give up! Try again.

@Tom J. ..let's connect..i'm in charlotte
btw, j, best of luck to you guys..been meaning to come down to atl for a day and check out some apartments..maybe we can meet up for lunch

@Steven Hamilton II - Sounds great...I'll be up there a lot over the next couple months, I presume... :)

@Tom J. - I've always been interested in getting familiar with NC real estate, since it's relatively close. I'll definitely let you know next time I'm in town.

@Tracey Williams - Realistically 10-12 weeks (hopefully). It would be an 8 week project here in Atlanta with my current crew, but between the new subs, the longer permitting process, and the fact that some of the foundation work can't start until August, things will be longer -- and if things don't go smoothly, it could be longer than 12 weeks.

@Bryan A. - If you come down to look at property, let me know...happy to take a look with you. And I'll let you know next time I'm up in your neck of the woods.

J - Thanks again for taking the time to meet with me. It's been great getting to know you, Marty and James. I hope your project is a huge success and I will help out anyway I can.

Congrats to all of you! J, your reputation and results speak for themselves, and along with Marty, I have no doubt that you guys will make the deal a winner. Thanks for sharing the details. I'll be sure to follow your updates!

A quick update on this project, as a couple people have asked...

We've added a good bit to the scope of work (including some reconfiguration, structural changes, etc) and the budget is now around $95,000. We recently got our final architectural drawings submitting to the city for permits and hopefully we'll get the permits granted next week. We're planning to start the bulk of the rehab the following week.

If anyone is interested in following along, Marty and I have a blog that we're updating...it already has a detailed budget breakdown for this project, schedule, architectural drawings and pictures of the house:

http://flippingmilwaukeehouses.com/

As for contractors, we're doing pretty well. We have about 70% of the labor already contracted out (foundation, exterior work, electrical, hvac, plumbing, windows, etc); the bulk of the remaining work will be the carpentry, framing, sheetrock and paint -- which will all hopefully get completed by one or two crews of contractors and will hopefully be contracted in the next couple days.

Just a quick update on this first project...

After several weeks of frustration dealing with the city, we finally have permits in-hand and we kicked off the project today (other than foundation work and replacing the windows, which we sneaked in over the past couple weeks).

We have some demo pictures on our blog (see post above for link)...

We're hoping to get this done in the next 8 weeks on about $100K budget...most of our contractors are lined up, and so far, they're all great (very surprising, actually).

I'll post more as work progresses...

Marty Boardman @J Scott,

I am writing you to let you know that I am a man of my word.
With that being said, I just wanted to thank the both of you
for your time, advice and direction regarding pursuing real estate.

It took me an unanticipated extra thirty days to schedule
the test due to other obligations. However, I took for the first time
and passed my Real Estate License exam yesterday.

So, over the next year my biggest issue will be
- Locating an investor friendly brokerage to place my license
- Working for a broker where I can start out with minimum
marketing expense before obtaining results

Thanks again,

R Jenkins

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