All Forum Posts by: Andy Tomaswick

Hi All,

I had a question about the 70% rule. I understand that you're supposed to take 70% of the ARV and subtract out rehab costs. What does that 30% that's taken out cover? I'm assuming it's covering things like closing and holding costs? The reason I'm asking is that I got very lucky on a financing source that would dramatically decrease the financing piece of the holding cost. How much of the 70% is covered by each of these: closing costs, financing costs, and utilities/taxes holding cost? Is there any other cost that I'm missing that's wrapped up into that other than theoretically the profit margin?

Any advice would be appreciated. Thanks in advance!

Hi All,

I've been having a hard time finding a good GC in the Lansing Michigan are for some projects that I've had on my personal house.  I was planning on using that work as a screening process for potential partners.   Now this does not bode well for finding one that I could work well with for flipping.  Does anybody have a suggestion on a good GC to contact?

Thanks in advance.

Welcome to BP Ethan!  As everyone has said there are a lot of good resources here.

Hi All,

I'm looking for some references for insurance agents in the Lansing, MI area.  Anybody worked with anyone they had a particularly good or bad time with?

Thanks in advance.

It does, thanks very much Nick!  I'll be sure to talk to some banks around here.

Hi all,

I'm taking the first steps of setting out the goals I want to achieve in the next 5-10 years and I am running into a question I'm not yet sure how to answer.

Let's say I want to buy 12 properties in a year. Using something like the BRRR strategy will work in terms of keeping the original investment coming back. However, there is a limit to how many standard mortgages a person can have at a time.

So when calculating what I can reasonably expect to do in a year should I include the paying off mortgages so that I'm only carrying a reasonable amount? (4 say?) or should I plan on being able to get financing some other way - maybe a different bank or private lender? 

Any thoughts are appreciated.  Thanks in advance!

Hi All,

I know it's standard practice to count a certain percentage (I've heard 10%) of the rent you get from a property as going towards repairs.  However, as I'm sure everyone is aware, these can be very "chunky".  You could go several months with no costs whatsoever, and then get hit a $3000 air conditioning bill.

My question regards how people handle this with capital.  Is it standard practice to just continually put away that 10% in a special account that's for "repair funds" for each property?  Do people just have a capital account that they keep at a certain level and replenish from the rent from all of their properties when it dips below a certain level?  If so, how do you calculate what that capital amount is?  As a percentage of the assessed value of the properties?

Any insight on this is much appreciated.  Thanks in advance for the advice!

@Kevin PrenticeThe state in question was PA, and no, I had never discussed agency with her.  As I was living out of state during the interaction (in MI, where I am now), most of my conversations with her were via e-mail.  I think I talked to her on the phone twice throughout the 2+ month selling process, and never met her in person.

I had a generally understanding of an agents role as I had used a few to buy a few houses before I sold this one.  However, it never really dawned on me that I should have had that conversation with her.

The more I'm thinking about it in this context the more I see the blinders I put on when I was going through it.  Since I'm on the other side now it's not so bad, but I'll have to keep a better eye out next time.

@Kevin PrenticeUnfortunately the PM designated an agent for me.  I can't speak much to her experience level, but I did find out later that she was actually a minor celebrity in the area and was featured on a national reality TV show (not one related to real estate, and I don't want to give away too many details).

Also if it matters, I found out during the closing process (which took another 2+ months) that the people who ended up buying the house were investors.  At the time I didn't really consider myself an investor - I had bought the house as my bachelor pad and had been renting it to a friend when I moved in with my wife.  But it makes me wonder why I would look at the math and say "this doesn't make financial sense" whereas someone else would look at it and say "yeah this is a good deal".  

In any case, I do hope this helps other BP members out.  I'll be sure to keep an eye out next time.

@Chris MasonAhh, so it's a timing thing. That makes sense. I've heard conventional loans to take longer, so I guess that makes sense. So you're suggesting doing the BRRR method everyone seems to love here, but refinance before you rent or even rehab, correct?