All Forum Posts by: Brandon Purdeu

Good afternoon BP,

Some day down the road I'd like to get into real estate development (commercial and residential). But while I spend my time in the trenches and flip SFH's and build a rental portfolio does anyone have a recommendation for me to turn to in North Carolina for a developer. I'd like to see if I can figure out how they evaluate building subdivisions or new commercial real estate. I will be leaving my job in about 12 months and would love to spend a couple years working for a developer learning the ropes. While I wait it out I'd like to mock up a couple of deals and bring them to a developer and see if I'm way off or see if I found a real deal. Any recommendations would be must appreciated.

@Chris Boyd Thank you the flip is exciting and I'm having a blast. I will go deal by deal with him, and I agree clearly defined roles is crucial.

@Brad Pickett I'll hold off on the attorney and see where it goes, start slowly and take the opportunities as they come.

@Sam Martin I except the same thing in my market just a few investors good news is he knows many of the investors so buyers list is already assembled!

Good afternoon BP,

Looking for some opinions. I am in the process of my first flip which I purchased off the MLS. Not a great flip by many flipper standards but I should profit $12,000-$15,000 plus the education from the process. Through the closing process I kept hitting the pavement with my relator trying to line up another deal in case this one falls through or I stumble across another MLS miracle.

In that interim I slowly came to the realization that the MLS isn't the best place to find flips and started to put together a mailing list. I have about 850 names to mail to and drove by about 100 of them to check the lists accuracy and property conditions. I was explaining the process to my relator and it peaked his interest. Suddenly he was interested in joining me in the venture.

I love my relator, he's an investors relator and has much better connections in the area I invest in as he's been in the community for over 20 years. He's been in real estate for about 3 years and has worked primarily with investors. We both have our strengths that we bring to the table, I'm creative and understand the construction side and he has the resale and market knowledge and can match the capital I have in my business. We have a very strong professional relationship.

Questions:

1. Are there any issues with a licensed relator being involved in wholesale deals? If so does it need to be disclosed?

2. Should I cut him in 50/50 or just go deal by deal?

3. Those that have started partnerships how did they progress over time?

4. Any other words of wisdom from BP would be appreciated!

Good evening BP! I have a potential deal that I want to present to some investors would love to get some eyes on it before I circulate it to my investors. Please provide any feedback you have positive or negative on the product.

Does anyone have recommendations on where to look for higher value homes? My experience is limited to smaller SFH but I ran across a large SFH on a golf course. The ARV is $640,000 with a listing price of $350,000 the entire home needs an update and high end finishes as that is what the market demands of this area. Private lenders are easy to find for under $100,000 but a little harder with this size of flip. I appreciate any insight.

Welcome Ashley! What area are you looking to invest in? I've only been up that way once to Mebane for a running race but loved the small town vibe!

I wrote last time about how I had put my first flip project under contract thought I'd share a little about the process. The buying process has been a little slow since I am purchasing from an estate and decisions are made slowly by the family. Typically it takes 3-4 days to get a counter offer response and legal documents take some time. Anyways just a reminder:

I offered on a 3/1.5 SFH in North Carolina. I negotiated from $60,000 to $31,000. Rehab budget was $18,000 but has increased to $22,500 due to some home inspections issues brought up.

So last post I had put the property under contract which began my due diligence time. My contractor is also a home inspector who I had to the home inspection. I gave him priorities for the inspection basically I gave him my list of potential deal breakers. I told him I wanted to confirm the termite damage was old and treated, evaluate the damage from a leaky bathroom and assess the HVAC's condition. I ended up paying a total of $460 for all of my inspections- $300 for home inspection, $75 for termite and $85 for HVAC. All told there was only a couple of surprises. 1. The water damage did damage to 2-3 floor joists, the subfloor in the bathroom and a 6ft section of the band joist which would add about $750-1000 to the rehab budget. 2. The insulation was insufficient in the attic, the home had 16in wall insulation rolled between the rafters and was only rated at R13 which it should be R30 for my area. This added about $1000 to blow in R30 into the attic and fix the insulation under the house. 3. The HVAC system needed about $800 of repairs done to the exterior system, a duct cleaning and repairing some lines. None of these were deal breakers in my opinion so I moved forward. I did counter asking the seller to fix or compensate the price for these repairs. They flat out refused which was not surprising as I had them very far off their asking price. I re-assessed the deal and decided the profit margin was high enough to still warrant the deal.

Next I started on working out insurance. I am using construction insurance which will cover the house itself as well as up to $20,000 in materials with a $1000 deductible for $500 over 6 months. The insurance covers my contractors tools and everything I needed it to. I also had my attorney start working on a couple of things. 1. Drawing up my LLC which is going to cost around $750 (I know I can have it done by legal zoom for $250 but I want a professional to do this and do it right as taking the cheap route can really bite me in the butt on this one) 2. Drawing up a promissory note between me and my private lender $150 3. Handling closing and title insurance $650 for closing and $100 for title insurance. My attorney fee is much higher than I anticipated and I think I will shop around after this one but these guys are the best in town so I'll get my feet wet with some good legal backing.

Lastly I've been working with my contractor on materials. I'm not purchasing anything until after closing but it doesn't hurt to shop materials now and know lead times to get the right materials in place. My contractor and I went to the local Habitat for Humanity Restore and found a set of cabinets that will work for the house for $775 and they need to be repainted for $200 which drops my cabinet costs by $1200 from my estimates. Additionally I shopped eBay for some fixtures. I found the floor vents that need replacing for $4 each versus Home Depot of $9 each. I will likely use eBay for cabinet pulls, vents, light fixtures and various small items like that.

Closing is next week and I'm ready to get cooking on this project. Once I close I'll submit full pictures of before and any more tips and tricks I think I have.

@Andrew Bourgeois I am closing on the property on the 12th and will begin work shortly afterwards. I was waiting to get through closing to walk through the full closing process and the costs associated with it. Should have a full update in two weeks!

@Tanya Bass keep running deal analysis until you start to see profit margins. The first 5-10 things I thought were deals weren't very good deals. Find one that has a reasonable margin and get out to the property, bring a contractor and put real numbers together see where you land!

@Brian Compton If you look at the forum categories one is deal analysis check it out. Post what you think is a deal and wait for some feedback. Great tool to get some seasoned veteran input.