All Forum Posts by: Dan Beaulieu

@Evan Polaski nailed it. It’s more about using durable materials...it should be in line with what the rental Market demands, and in line with the materials used in most comparable sales.

Granite vs laminate, and tile Shower vs vinyl surround are the 2 biggest things that appraisers look at as far as quality of finishes in my experience. Cheap subway vs $10 tile makes absolutely no difference. Builder grade granite (usually 3 flavors) vs higher end granite makes no difference. You can be cost effective and still Have a quality product in the end.

I usually just go with laminate countertops, but

I recently put granite in a couple rentals where the ARV justified it, because somebody savvy told me it would rent faster and for more. Nope. It Still took the same amount of time to find a tenant, and was still Right at market rent.

@Masud Khan I do flips and brrrr deals both ways...equity and debt. Sometimes both. With debt, you will obviously potentially make a lot

More money, but that comes with higher risk. If you can secure an equity partnership and pay them less than 50% of profits, that may be more enticing for them, but it is riskier for them. For you, it eliminates risk and feels nice and comfortable.

@Alex Heidenreich light cosmetic rehab is what 90% of my clients (and me personally) focus on for brrrr. Typically these range from 25-45k...quite a bit of cash to tie up in a property just starting out.

My flipping clients are the ones doing larger gut jobs right now.

 I've done a few assignments in Vermont, never an easy thing to get people onboard with since nobody does it here and it's an attorney closing state. I've used Jonathan Stebbins at Bauer Gravel Farnham to do it. 

@Devyn Caraballo some will even go to 100%, but will always require you to have sufficient cash reserves regardless for when things go over budget, or takes longer to sell, etc. Running out of cash is the #1 mistake flippers make, so the lender just wants to make sure you’ll be safe in the deal.

@Tucker Cummings this is a great strategy when you have plenty of cash reserves as a back up Incase your rehab goes over budget, or you experience a bad contractor, or the back end appraisal comes in Low. I think you’re safe doing 2-3 at a time instead of one in your case.

My main concern is if your hard money lender is financing 75% of ARV and you still need to borrow from a private lender...indicates you are over 75% of ARV all in. That's too tight of a deal for that much leverage. You'd be much better off doing 2 deals at a time with the hard money lender only, and your own cash.

Another thing to consider is if the hard money lender allows seconds? Most don’t.

Just speaking from experience, most of my clients that have tried to do this find themselves trapped at the refinance phase when the appraisal Comes in too conservative. Their main mistake was paying more than 70% of ARV for a deal that they planned to over leverage on, and not having enough in cash reserves Incase anything goes awry (which it will)

Best of luck!

I'd be happy to help! @Cordero Miguel Please feel free to reach out any time to discuss. 

@Brooke Hallock Made the same move a couple years ago from Nashville to Burlington. I still do tons of deals down in TN, as well as Hard Money Lending in TN cities, and do rehabs and rentals up here in Vermont. I got licensed up here with EXP, and started Burlington House Buyers, and we are crushing a bunch of flips here locally as well as some solid cash flowing rentals. I was running a meetup group for a while Pre Covid, hopefully we can get that started again soon. Please reach out! Always looking for partners, people to buy our wholesale deals, and to expand the network. 

@Clayton Ensminger One of my partners is 74 and loves talking to motivated sellers, lending private money, and managing rehabs. How much can your money compound in the next 30 years if you already have money and can start generating 20-50% IRR?

Once you do a few good deals and realize how amazing this game is, you'll be in it for life. Shoot, I'm not even going at a fast pace...just a few new rentals every year. Some of my clients are doing 5-6 BRRRR deals at a time! Multi is a very competitive space in Chattanooga right now, but deals are certainly still out there. How do I know? Because we fund over 10 HM deals every single month in Chattanooga.

Too many new investors wait for that perfect deal and never find it. Get a decent deal that doesn't need a full gut rehab, and jump in. You'll at least want to read a few books first though...

Here are some great reads when just getting started: 

1. Rental property investing - Brandon Turner

2. BRRRR - David Green

3. The book on negotiating real estate- Jay scott

 See that's the thing...a low crime area with better schools / nicer properties will have much lower cash flow than higher crime areas, but a better chance for appreciation. It will be very difficult to get both. East Ridge is a great area for rentals...one of my favorites actually next to Brainerd, East Brainerd, and Redbank