All Forum Posts by: Dell Schlabach

@Rod Smith back in the day we used to buy for cash and do the bellamy strategy, refi 3-6 with a commercial lender take the cash and repeat. 

Today we buy fix and sell exclusivly, but I know of two local portfolio lenders, (local banks with 3-10 branches, that will refinance rentals as soon as they are rehabbed, you have a tenant with a lease in place and if the property appraises, they will refinance immediately. 

I would check some of the smaller banks locally who do not sell all their loans, I suspect you will find someone. 

Ask for a senior loan officer, or commercial loan officer, or branch manager you need to find the loan officer who is not just doing typical residential loans, but one who is looking for business. 

couple ways...we fund most all our rehabs with private lenders...

But typically your private lender sends the purchase amount to the title company to close on the property. 

A mortgage gets recorded to secure their interest

They give you the rehab money. 

Every once in a while I get someone who insists on just giving me the money, i write them a promissory note, then I fund closing, and record a mortgage.

To give security for such deals I have recorded a mortgage on a different property to secure their interest, that way you have cash to write cash offers. Otherwise technically they are financed offers. Although I admit I write them as cash offers. 

Instruments between you and  your lender;

Promissory note spelling out terms

First mortgage on the property for lender

Insurance naming lender as mortgagee /  additionial insured.

Does that help

There are a lot of calculations you can do to calculate averages, but who wants to be avarage. 

Just looking at the limited information, if that was my market a fully rehabbed house, assuming these solds were average houses, I would expect to list mine for 99,000 and sell for 89,000-99,000, we never price below the market and our houses sell on average in just under 30 days for the past four years. I would make sure Im profitable at 89,000. 

I suggest finding a few of the top selling realtors for your neighborhood, get an opinion, or three , will get you closer to a real arv then any average calculations you can do, as well as you will find out critical factors to consider, such as, in order to get your price you need to ad an extra bath, etc.

Couple options for vacant properties, we insure all ours through travelers insurance, at very reasonable prices. 

I know a couple rehabbers who insure through auto owners.... find a good independent agent who writes through multiple companies and odds are they can hook you up. ... or google the above companies and find a local agent. 

Good luck

my advice if you want to become good at this you need to learn how to determine your own rehab cost. I highly recommend buying J Scott book estimating rehab cost, and use it as your Bible. 

You can ask a contractor, or an experience rehaber will probably get you closer.. an experienced rehabber if you're going to find them deals may do it for free. A contractor I would expect to pay maybe a hundred bucks, assuming you're asking him to ballpark the numbers and not write up a full blown quote.

if you see a contractor make sure it is someone who is used to doing rehab s for investors, otherwise the renovation quotes potentially can come in at almost double... for example it is not unusual for a contractor to charge $4000 for a furnace that rehabbers typically spend 2000 for.

The other thing I would recommend is get J Scott book on estimating rehab cost, one of the best investment you can make. From that you will be able to come pretty close on your renovation cost estimating. if your contractors quote you significantly different prices I would get more quotes. 

I would negotiate my best price, sign a contract, I calculate my own renovation costs, but in your case give yourself an inspection contingency , maybe 5 to 7 days so you can bring contractors through and make sure there aren't any major structural issues. you can get your quotes during that time. I would pay them 500 bucks get it locked up, people lose good deals all the time because they don't move fast enough. 

I would have a contractor check the roof it may be more a rafter issue then a foundation issue.  I have seen many 2 by 4 rafters that did not support the roof properly, and you get that kind of bowing. That is easier fixed then foundation issue, typically.

I would get 3 quotes from other HVAC contractors. if there is furnace and duct work, we typically pay 1800 dollars for the air conditioning. Anything over 2200 I think is too much.

I tried a lot of different aspects of real estate investing, took a crash, lost it all decided to focus on one thing I did well and become exceptional at it.

I always enjoyed transforming ugly houses into beautiful ones, never liked dealing with tenants.

decided to put all my eggs in one basket and guard the basket.., focus on one thing.... best decision I ever made.