All Forum Posts by: Arpan Patel

Agreed with above. You will need to have the business account to separate personal and business. Furthermore for asset protection, you will want your layers of protection in place. You can wholesale if you have a buyer in place or can quickly find one off of your list. As for the presentation of the deal, one page and try to including everything you'd want to see if you were to lend that same money. I know ROI and capital layout is important but so is monthly expenses, expected gross, debt, to equity, etc. I hope this helps

Yes that is what we do. We bring some resources to the table but we mostly partner with individuals for rentals who have funds. You both are bringing value to the table so it can work. Just be sure to have your operating agreement in place - drafted by a lawyer - to cover any scenarios that may come up around day to day activities and even as far as dissolution. I hope that helps

I agree in the value of full disclosure. Also, that people's time should be compensated as well before the business gets compensated in this type of scenario. I certainly don't think contractors have a disease - well maybe an affinity towards a broken in hammer (might just be my contractor though... he loves that hammer) - and I agree in that my main concerns are mostly related towards a professional arrangement between partners with full disclosure. That question to me is key. "Does the contractor add value to your investment business that would not be there if you just hired them."  Well said.

@Trent Vanderzee: I understand the point and I maybe I wasn't very clear in my explanation. There are two parts of the repairs, the materials and the labors of the those individuals who are physically dong the work and then there is the profit (or management fee if you like) for the GC running the job. My only point was whether or not the property generates income and hits its numbers for cash flow, for the GC, specifically, those are all secondary incentives. The GC has already been paid their normal fee for running a project. The rest is gravy for the GC but that secondary part is where the investor gets paid. All I am saying is that I can see how someone might be nervous by partnering with a GC based on the investor getting paid after the GC has already been paid his management fee. 

Now, if the GC can show that those fees were for running the internal house besides the pure labor of those performing the work or materials, then I can see how that can start to make sense. There are other costs for the GC in house that will need to be taken care of as well - bookkeeping say - that without being paid for would hamper the GC's ability to get the job done and that may ease some people into the deal. I don't personally partner with GC's and I haven't heard of people who have been successful doing so. My experience is anecdotal and shouldn't be taken as a rule or anything; it is just how we run house. I hope that helps clarify what I was saying.

I probably would figure out how to get more than break even on the cash flow. Up here, most banks commercial banks will not lend unless you make money (1.2 debt coverage or better) so there is that. 2% seems high for here but that may very well be the case in your area. For the insurance, just make sure the coverage is good. The price sounds find but what is the bundle of coverage you are getting? That is, to me, more important than than the dollar amount when evaluating different policies. Lastly, I misunderstood the framework of you original question. I thought you were trying to figure out what was better, El Salvador or US. I think it is always best to start local. I apologize for misunderstanding the question. Happy Hunting!!

Agreed with @Manolo D. in that your role is now a managing member. As far as finding deals, start with conducting some market analysis. If you don't quite know how to do that, then check out some of the webinars and other area of BP to get familiar in how to do that. Try getting youself used to the purchase and sales or rent numbers as appropriate. Money should be easier for you to raise because you fully understand the construction numbers and process. Lenders will help you out with what a property is and will be worth based on their appraisal (all my Hard Money lenders conduct this kind of analysis) and a good sales agent is another good check. Lastly, figure out what the area demands in the homes which you will get a good feel for by going to good homes or sale or rent and just looking around. You have a great advantage in that the scariest part of this game can be the construction but you have that down. The other pieces are acquisitions - which your agent and lender can help you with - and disposition - which your agent will primarily help you with. The rest, you will figure it out as you do it!! Good luck, PM me if you'd like to discuss further and Happy Hunting!!

Agreed with @John Mathewson in that it is probably related to experiences. I don't believe it is meant as a slight to you or the trade but it can be scary to walk into a partnership where one partner is going to get paid regardless of the outcome. (The assumption here is that the contractor is getting paid two ways, first as a contractor and then again as an owner) If neither gets compensated until the property does well then there should be no issue. Contractors - as a gross generalization - are seen as not as very professional. This of course can and cannot be true depending on the person. Furthermore, there is a perception that contractors don't want to go by a contract or a written agreement which is one of the base components of any good partnerships. Just some thoughts mostly rooted in perception and the aggregate of "others past experiences." I hope that helps,

They are very comprehensive. I have added one or two advanced metrics but they are wonderful!!! Plus they come out looking professional and I personally have showed them to potential lenders with great success. I suggest trying and using them on the regular. I have my own spreadsheet because I have modified parts but they are truly wonderful!! Let me know if you need any help getting through them and I'll do what I can. Good Luck!

So if I understand correctly, you are trying to purchase property and make it work. In that case, check out leanairbnb for a pretty good calculator on vacation rentals. Then take a look at your local market where you other investors are asking you to manage their properties. See what properties that fit the profile of what you are managing and the numbers for that calculator. Then see about Lenders, Attorneys, and CPAs (probably in that order) to get the deal set up right. Lastly, provide, find, or raise the money to purchase (I'd stay away from properties with any more than light rehab at first) and get it ready for your vacation rental market with you know what that would entail. Lastly, just plug it into your own system of management and that should be the trick. I don't want to over simplify it but to me those would be the steps to take and in the relative order. I hope that helps. Please PM me if you'd like to go through this in more detail. Happy Hunting!

@Eric Marofske: 100% agree. Gotta know your numbers which is something that is completely within the investors control. Rehab and tenants not as much as purchasing correctly. 100% agreed.