All Forum Posts by: Eric Sullivan

With some simple carpentry work you could turn those doors into shaker style. Paint them white. Switch out the hardware (black pulls are nice). I would get some granite that a yard has as scrap from another kitchen this usually brings down your price per sq. New SS appliances, and probably a new faucet. Paint the walls white as well. This kitchens looks to be a little tight so the light colors should open it up.

Always do work under contracts with sub contractors. Put fair payment terms for both parties and contingencies to protect yourself. Contractors will try to pull a lot of moves to get more money out of you. "Oh I didn't see that line item in there" under services delivered. Well you signed it. Having everything in writing will really protect you from a tough conversation down the line when you have many people working on a project.

Hey Mike, if there is a list for future events please let me know if I can be added. [email protected]

I would also add that while this is an out of state investment experience she had, can also happen right in your own town. When we first launched our company we hired a GC to run 2 projects. Both of which were 3 family full guts that we were turning into condos. I ended up running the job because at one point he didn't show up for 2 months and also his recommended subs didn't follow plans, sub par work. But I was on site several times a day catching everything and making them fix it. Now we have people we have worked with on several projects and manage our own projects in house. 

What I have learned is that no one will ever care more than you (this goes for any entrepreneurial endeavor). Subs in most cases will hustle to get their job done and don't think about the next guy so you need to be the brains and ask yourself why all the time. So as a passive investor whether it's flips or holds you need to really align yourselves with professional organizations with a track record. If someone is wholesaler, then they aren't doing flips, or holds. That isn't their expertise. We take all our potential investors to our jobs sites and show them the work first hand, or video walkthroughs on facetime. There has to be credibility, accountability, and trust when taking other peoples money in this business.

I use Hubspot. Which I have used in the past for different businesses as well. It works well customization and automation wise for our needs. I saw you mentioned you are familiar with it already so I won't elaborate too much. There are other software products out there for larger RE investment businesses that have a CRM component among other pieces. Juniper Point is a popular one.

For rentals vinyl plank is a great option. Around us even the high end apartment buildings use it and people pay 3-4k a month for those units. People do love hardwoods though so if you have decent hardwoods you have two options. One refinish them if you think it would increase your rents. Second is put the vinyl over it and save the hardwoods for if you have a condo exit potentially in the future.

We are lucky in the north east that a lot of homes were built with nice wood floors that have remained for over a 100 years and with a little tlc can be restored to looking brand new. I am not sure how it is where you are.

I love seeing posts when you guys tell me you get properties for a 100k. In the Boston area a parking spot costs a couple hundred grand haha.

In terms of executing brrr I would say that you also have to consider where we are in a market cycle. I am not going to reiterate a lot of other great comments by other people in this thread but the strategy has to change as the market cycle progresses. As well geographic location. We have people from all over the place on BP. So while maybe somewhere in Idaho you can execute these left and right, but in someone else's area where they live it may not be possible or more infrequent.

Also don't forget about cost segregation studies. If you have a proper tax strategy and diversify your portfolio from flips and holds you can achieve a net 0 tax. I feel like in a lot of cases with newer investors they feel they have to be in one bucket or the other. Why not both? If you are good with the numbers can model out how to balance your portfolio to help offset the gains from the flips. We currently run about a 2/3 flips to 1/3 holds. We have 30 units in total we purchased this year and it works out well for us and our investors.

Just to pile on and comment on a few things that were said in the thread. First off you should work with @Lien Vuong. I have done deals with her and she's a great investor focused agent if you are trying to find off market opportunities. 

Second is 2 families are hard to make work at this current stage in the market. Both as a hold and even as a condo project. That third unit really can make the difference. More units in most cases can mean lower price per door which obviously can be to your benefit.

The challenge with the Northshore is most sellers are not sophisticated investors. They don't underwrite their own deals and pull magic numbers out of a hat that leave you with a negative ROI a lot of times. This is also the fault of a lot of agents around here who don't do their clients any justice by trying to show them comps and they can't underwrite the deals themselves either so it's the blind leading the blind which means no deal for you sadly. You will se a lot of this. But there are deals out there and patience is key.

@Philip Ganz to talk about the 203k loan in theory is great but in practice is a real challenge. Now I have never used one of these personally but talking with a lot of contractor friends they won't touch them. Mainly because the paperwork and process around them is a huge pain. Secondly there is a ton of work out there so why take on the extra headaches?

Also be careful as a new investor when investing on appreciation. I personally would agree with what you said about it being icing on the cake. I wouldn't use it as a metric to make smart financial decisions upon. But again that is my personal opinion and I know experienced investors who will buy based on that. Being at the potential end of a cycle think about the hold time to achieve that appreciation you maybe looking for.

I only invest in Salem Ma right now so if you want to chat more about the Northshore I am happy to have a conversation. Feel free to connect on here.

Investment Info:

Small multi-family (2-4 units) fix & flip investment in Salem.

Purchase price: $510,000
Cash invested: $330,000
Sale price: $1,150,000

This 2 unit property is located in one of the most desirable neighborhoods in Salem. The property is perfectly situated for city buyers who can commute quickly to Boston. Our plan is to turn this into 2 luxury condos with off-street parking. The first floor will be a 3 bedroom 2 full bathroom layout with an open kitchen and living. The second floor will be a townhouse style unit consisting of 5 bedrooms and 3 full bathrooms.

What made you interested in investing in this type of deal?

We like condo conversion projects in the Salem area.

How did you find this deal and how did you negotiate it?

This was an on-market deal posted to MLS.

How did you finance this deal?

Bank financing, 25% down and 100% of construction.

How did you add value to the deal?

Added 300+/- sqft and we are gut-renovating the entire house.

What was the outcome?

In progress