New member from Columbia, Pennsylvania

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New member from Columbia, Pennsylvania

Jonathan Lehman
Lancaster, PA · Member since 2015 · 27 posts · 5 votes

Hi BP community! My name is Jonathan Lehman. I'm from Columbia, PA.  My wife and I have been married for 10 years and we have 3 boys.  I've had an interest in real estate investing for a while now, but have yet to really get into it.  When we bought our house we intentionally searched for a property with a rental possibility.  We found a property with a house and a separate 1 BR apartment building.  After rehabbing the 1 BR apartment, we rented it out and it helps to pay most of the mortgage.  

My profession is a heavy equipment operator in excavation.  I mainly operate excavators and backhoes.  I've been in this field for 14 years and really enjoy it, but when I am ready to retire, I want to be able to.  I'd say my goal in real estate as of now is to be able to retire in 5 years.  I would like to begin by doing at least 1 flip this next year. 

I just have to say a big thank you to Josh Dorkin for starting BP.  (I feel like I know both you and Brandon from listening to your podcasts.)  This is such an awesome idea, to create a place where like minded people can help each other and learn from one another.  There is such a wealth of knowledge here.  I know I've barely scratched the surface.  And I look forward to meeting many of you in the BP community!

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Christian Bors
Real Estate Agent · Mechanicsburg, PA · Member since 2014 · 529 posts · 217 votes
9y
Originally posted by @Steve Babiak:

@Jonathan Lehman - on the third Thursday of the month there is one at the Lancaster Bible College, and I believe @Christian Bors hosts one in York County.

 I am the current president of CARPOA (Camp hill).  We meet the first Thursday of every month.  January is usually one of our biggest meetings.  Mark Wetzel, a local CPA, speaks to our group about taxes.  You should try to attend if possible.  Send me a PM if you want more information.

I try to attend several meetings a month, including the one at Lancaster bible college.  I would strongly recommend attending that meeting since its in your back yard.  I really enjoy that group.

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  • Daniel HymanBusiness Member
    CPA · Milwaukee, WI · Member since 2016 · 2k+ posts · 1k+ votes
    9y
    Great intro post Jonathan Lehman ! Welcome to the community!
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  • Thomas FranklinPro Member
    Real Estate Investor · Miami, FL · Member since 2010 · 939 posts · 739 votes
    9y

    @Jonathan Lehman Since you are interested in fix and flips, I propose the following action plan. The first step would find an Investor Friendly Realtor assuming you do not have access, to the MLS. I would suggest that you interview several Realtors and ask them the following questions, to ascertain if they are truly Investor Friendly, or if they are throwing you a sales pitch.

    1. How many investors do you currently work with and how many investors have you worked with, in the past?

    2. How many transactions have you closed, with investors?

    3. Do you currently own any Investment Properties? If so, what type do you own?

    4. Are you a member of any REIAs?

    The next step would be to work with the Realtor and determine the hot markets, in your County, with the greatest number of sales over the last 90 to 120 days. Personally, I would prefer 90 days because markets are always changing. This list would contain the zip code and corresponding name of the municipality. In addition, a breakdown of the number of SFRs, Townhouses, and Condos, with corresponding ADOM (Average Days On Market), and Median Sales Price, for each municipality. This will be your Farming Area. From this data, you can utilize a website bestplaces.net that will give you a breakdown of the percentage of homes that sold, in various price ranges, for a given zip code. You can identify the two highest retail price ranges, in greatest demand, per zip code where you can list the rehabbed property.

    You can use the Realtor to help you find deals and also use Wholesalers. If you acquire a property, from a Wholesaler, once the property is rehabbed and ready for the Retail Market, allow the Realtor that provided you the zip codes, to list the property for sale. This creates a WIN-WIN Situation and gives the Realtor incentive, to work harder on your behalf. 

    1Reply
  • Thomas FranklinPro Member
    Real Estate Investor · Miami, FL · Member since 2010 · 939 posts · 739 votes
    9y

    @Jonathan Lehman Many Investors that flip homes use the 70% Rule that says 0.7 x ARV - Repairs = Your Maximum Allowable Offer (MAO). What hurts Investors that use this formula is it does not account for Holding Costs, Backend Selling Costs, etc.

    I use the following formula to determine my Maximum Allowable Offer (MAO). This formula is the Profit Margin Formula that accounts, for 99.99%, of everything.

    ARV - Desired Profit - Closing Costs to Buy - Repairs - 10% of Repairs - Holdings Costs - Concessions - Realtor Fees - Closing Costs to Sell = Your Offer (MAO or Maximum Allowable Offer).

    ARV: After repaired value or what you think it will sell for once repaired.

    Desired Profit: This should be taken off the top first. Most people run their numbers to determine what their profit should be. That is backwards, you should use your profit to determine what your offer should be. As a General Rule, my Desired Profit is $20,000 or 20% of ARV whichever is greater. To have an offer accepted, one may need to adjust their Desired Profit; however, it should not be below $20,000, or what one feels is acceptable.

    Closing Costs to Buy: What is it going to cost you to buy the property? If you are using hard money you need to budget for the points and fees as well as traditional third party closing fees.

    Repairs: The money it is going to take you to rehab the property plus an extra 10% of estimated repair costs to account for unexpected repairs.

    Holdings Costs: Here is where a lot of investors get tripped up. Start by determining an amount of time that you will hold the property, probably 4-6 months. Then add ALL costs related to holding the property (utility costs, insurance premiums, property taxes, loan payments, etc.).

    Concessions: Concessions are what you give back to the buyer at closing. It could be for closing costs, unfinished repairs or something else. I typically subtract 3%, of the ARV.

    Realtor Fees: What is the commission you are willing to pay your listing agent (unless you are the listing agent) and the buyer's agent. Utilize 6% of ARV.

    Closing Costs to Sell: Title fees and other closing costs. You can budget around 4% of the sale price to cover these.

    This is a conservative formula. If you come out ahead without Buyer Concessions, on budget, etc., this puts more money in your pocket, when you close at selling.

    1Reply
  • Ashley WilsonPro Member
    Rental Property Investor · Radnor, PA · Member since 2015 · 178 posts · 125 votes
    9y

    Congratulations and welcome!!! I am still relatively new to flipping (just finished our second year in business), and I have several blog posts (which you can link to from my page) about being a newbie and how we went about getting started. I am also from PA, so yay East Coast! I wish you lots of success and if you have any questions, feel free to ask:) 

    Podcast Guest on Show #277
    0Reply
  • Jonathan Lehman
    OP
    Lancaster, PA · Member since 2015 · 27 posts · 5 votes
    9y

    @Daniel Hyman Thanks! I'm excited to be here and get involved.

    0Reply
  • Jonathan Lehman
    OP
    Lancaster, PA · Member since 2015 · 27 posts · 5 votes
    9y

    Hi @Thomas Franklin and thank you for the advice!

    0Reply
  • Jonathan Lehman
    OP
    Lancaster, PA · Member since 2015 · 27 posts · 5 votes
    9y

    Thanks @Ashley Wilson!  I'll be sure to take a look at your blog to see how you are doing flips and how you got started.  I still feel a bit overwhelmed getting into this. There is so much to learn!  I just don't want to make the mistake of "analysis paralysis" and never actually go get a deal. 

    0Reply
  • Ashley WilsonPro Member
    Rental Property Investor · Radnor, PA · Member since 2015 · 178 posts · 125 votes
    9y

    @Jonathan Lehman I completely understand.  And IMO analysis is still a good thing, so I would be happy to help you with any questions you might have:)  If you are investing in Columbia too, I can help you get started with the analysis part (don't worry we don't compete in that area:))...and actually some of my contacts may even cover that area as well.  Looking forward to speaking with you and happy reading, hopefully you will find some helpful tips in some of the entries I have posted!

    Podcast Guest on Show #277
    0Reply
  • Jonathan Lehman
    OP
    Lancaster, PA · Member since 2015 · 27 posts · 5 votes
    9y

    @Ashley Wilson thanks for your willingness to help.  I'm sure I'll have lots of questions once I get started looking for deals.  I still feel like I have more to learn before I start looking.  Thanks again!

    0Reply
  • Mark Nolan
    Professional · Carlsbad, CA · Member since 2012 · 12k+ posts · 1k+ votes
    9y

    @Jonathan Lehman

    Welcome to Bigger Pockets. The Bigger Pockets book store if full of great books: https://www.biggerpockets.com/store

    0Reply
  • Steve Babiak
    Real Estate Investor · Audubon, PA · Member since 2009 · 13k+ posts · 8k+ votes
    9y

    Welcome to BP. You are in Lancaster County, and a short trip to York County - there are a number of BP members in those counties and there are some good investing meetings out that way as well. Since I mentioned those counties, maybe the members there have those as keywords and will post on here.

    0Reply
  • Jonathan Lehman
    OP
    Lancaster, PA · Member since 2015 · 27 posts · 5 votes
    9y

    @Mark Nolan Thanks for the tip!  I visited the BP book store and have started reading some of the books from there.  I can't believe the wealth of knowledge to be had here.

    0Reply
  • Jonathan Lehman
    OP
    Lancaster, PA · Member since 2015 · 27 posts · 5 votes
    9y

    @Steve Babiak Thanks!  I would like to find some good meetings to attend in this area.  I'm glad to hear that there are some fellow BP members close by.  

    0Reply
  • Steve Babiak
    Real Estate Investor · Audubon, PA · Member since 2009 · 13k+ posts · 8k+ votes
    9y

    @Jonathan Lehman - on the third Thursday of the month there is one at the Lancaster Bible College, and I believe @Christian Bors hosts one in York County.

    0Reply
  • Jonathan Lehman
    OP
    Lancaster, PA · Member since 2015 · 27 posts · 5 votes
    9y

    Just saying hello to those of you didn't see my post earlier.

    0Reply
  • Dmitriy Fomichenko
    Solo 401k Expert · Anaheim Hills, CA · Member since 2012 · 18k+ posts · 6k+ votes
    9y

    @Jonathan Lehman

    Welcome to the BP family! You came to the right place to learn all about real estate investing! Here are some recommendations for you:

    Find and connect with other BP members that are in your area: http://www.biggerpockets.com/meet
    Set up keyword alerts to be notified of the topics that interest you: http://www.biggerpockets.com/alerts
    Read Beginner’s Guide: http://www.biggerpockets.com/real-estate-investing
    Check out BP Podcasts: http://www.biggerpockets.com/renewsblog/category/podcast/

    Wishing you the best!

    1Reply
  • Jeremy Hunsberger
    Investor · Lancaster, PA · Member since 2015 · 64 posts · 13 votes
    9y

    Welcome!! BP is an awesome resource with great people who are willing to help! Harrisburg has a great real estate meeting as well as the lancaster meeting. Best of luck! 

    0Reply
  • Jonathan Lehman
    OP
    Lancaster, PA · Member since 2015 · 27 posts · 5 votes
    9y

    @Dmitriy Fomichenko Thank you for the welcome and the advice!

    0Reply
  • Jonathan Lehman
    OP
    Lancaster, PA · Member since 2015 · 27 posts · 5 votes
    9y

    @Jeremy Hunsberger I haven't gone to any real estate meetings yet but want to.  Thanks for the advice!

    0Reply
  • John-Delfin Skovira
    Rental Property Investor · Mechanicsburg, PA · Member since 2016 · 19 posts · 4 votes
    9y

    @Jonathan Lehman Welcome to bigger pockets. I am over in Mechanicsburg and new to real estate investing as well. If you are thinking about attending any of the upcoming REIA meetings here are some links with meeting dates/times

    https://www.meetup.com/LIMG-Harrisburg/

    https://www.meetup.com/REIMG-Lancaster/

    https://www.meetup.com/Central-PA-Investors/

    CARPOA (capital area rental properties owners association) meets at the Camp Hill Giant.  THey have a facebook page.

    I plan on starting to attend some of these meetings next month.  Best of luck!

    1Reply
  • Jonathan Lehman
    OP
    Lancaster, PA · Member since 2015 · 27 posts · 5 votes
    9y

    @John-Delfin Skovira Thank you so much! Yes I want to begin attending some REIA meetings in my area. I haven't been to any yet. This is very useful information. Maybe I'll see you there. Best of luck to you as well!

    0Reply
  • John-Delfin Skovira
    Rental Property Investor · Mechanicsburg, PA · Member since 2016 · 19 posts · 4 votes
    9y

    @Jonathan Lehman No problem.  Yeah maybe we'll run into each other, Lancaster is not too far away.

    0Reply
  • Jonathan Lehman
    OP
    Lancaster, PA · Member since 2015 · 27 posts · 5 votes
    9y

    Hey everyone!  Just wanted to get my post back up for those who didn't see it earlier.

    0Reply
  • Christian Bors
    Real Estate Agent · Mechanicsburg, PA · Member since 2014 · 529 posts · 217 votes
    9y
    Originally posted by @Steve Babiak:

    @Jonathan Lehman - on the third Thursday of the month there is one at the Lancaster Bible College, and I believe @Christian Bors hosts one in York County.

     I am the current president of CARPOA (Camp hill).  We meet the first Thursday of every month.  January is usually one of our biggest meetings.  Mark Wetzel, a local CPA, speaks to our group about taxes.  You should try to attend if possible.  Send me a PM if you want more information.

    I try to attend several meetings a month, including the one at Lancaster bible college.  I would strongly recommend attending that meeting since its in your back yard.  I really enjoy that group.

    2Reply
  • Jonathan Lehman
    OP
    Lancaster, PA · Member since 2015 · 27 posts · 5 votes
    9y

    @Christian Bors Thanks for the information!  This is really helpful.  I will try to make the January meeting.  

    0Reply
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