All Forum Posts by: Rob Beeman

@Luka Jozic  My vote is similar to some others. Clean up the cabinets, maybe update the hardware (handles), perhaps change out the counter top (depending on current condition), and if you don't want to spend the cost to install a tile back splash, then maybe install some waterproof wall board (can be purchased at Home Depot/Lowes) as the backsplash.  The kitchen & baths are what attract renters/buyers, so always budget for adjustments on these two line items. Rob

@Nick Wehrley  Nick, its been some time since I flipped, but here is what I used to do for color matching/interior ideas. I would visit the model homes of local large builders and "borrow" their ideas. I would take my Sherwin Williams paint swatch tool with me to gain colors that came close.

If you use lighter colors on walls & ceilings it will make the rooms appear larger (dark colors can do the opposite). I would recommend darker colors for wood floors. Keeping the ceiling the same color as the walls helps in painting and while it doesn't supply a custom look, it doesn't cast shadows either.

Borrowing ideas from the models of large builders always worked for me, and they spent dollars on designers and/or focus groups to come up with the plans.  Hope it helps, Rob

@Oscar Beteta  Credit unions are the best bet. Local to Philly are:  Philadelphia Federal Credit Union, TruMark Financial, American Heritage Credit Union and Merck Sharp & Dohme Credit Union.  Good luck, Rob.

@Account Closed  I have always taken the approach of matching my personality with the 3rd parties that I work with (lenders, contractors, settlement agents, insurance agents, wholesalers, realtors, etc.). If I can't jive (get a long with) the resource then the fees and terms seem to me to be secondary. Since as investors we are self employed, we should have the luxury of enjoying what we do and who we do it with. Life is too short to introduce unnecessary stress. 

In stormy markets (like this one is starting to be), some lenders change their guidelines, perhaps pause, or terminate some products, or worse - close up shop all together. So, one necessary characteristic in the go-to-lender is that I must be able to live with their changes and products being offered, and feel comfortable that they are NOT going to disappear before I am able to utilize the rehab funds in escrow with them (actually had that happen to me in the last stormy market). Hope that helps. FYI - I will send you a DM on how I might be able to help with 100% rehab financing to 70% ARV.

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Capitalize on the opportunity to gain knowledge and awesome networking in multiple ways at this FREE VIRTUAL Knowledge & Networking Event on Tuesday December 13th at 7PM EST!

The meeting is totally VIRTUAL, so you can attend it from anywhere!

There will be a 15 minute Knowledge segment (knowledge gained from hands-on, in the trenches, deals done experience) and then AWESOME networking with real estate investors of every level from all parts of the country.

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@Robert Adkins I like the idea of using a short-term rehab loan as a form of cash out refi to conduct the rehab needed to increase rents and increase value. This would also add a little title seasoning to the transaction which might be helpful in the 30 year rental cash out refi loan. When you are ready for that step, most DSCR lenders will not look at your income or debts, but use the income and debts for the property. Typically in today's market they want to see at least a 1.15DSCR.

However, besides the loans for rehab and rental, here are 2 items that need to be addressed if they are not already:

1.) If the property is not already in an LLC, transfer it to one when you close on the short-term rehab loan. This will keep the transactions commercial in nature.

2.) See if that 2nd building on the property is legit. Does it show up on tax records as part of the parcel? I recently had a borrower who had a second 3BR/1BA building on the property (in addition to the main house) and even though it was rented to the SAME person that occupies the main house, the appraiser couldn't mention it, nor use the income from it, as at the time of construction (or in this case conversion) permits were NOT acquired to do so. The building wasn't showing up as existing at the county records office, so the income (and value) for it couldn't be considered in the valuation of the asset. Additionally, now he has an issue that it is occupied living space that isn't technically qualified in the eyes of the county. He is going through the steps to get it corrected, but its a headache. Good luck.

@Mike Jay Mike, here is what I have done in the past. For starters I flipped in multiple areas (and states), so first I would clarify with the local municipality what work qualified for necessary permits. I discovered that not all work required permits in some areas. 

The areas where general contracting work (non-specialized work, with specialized work being electrical, plumbing, HVAC) could be done under what was commonly referred to as "interior or exterior alterations" but did require a permit, then I would gain a General Contractor's license in a LLC's name so that I could gain the permits in that local area. Additionally I gained liability insurance in the LLC's name and had to produce notarized letters stating that there were no employees or company vehicles so no need for worker's comp insurance or vehicle insurance. Almost always I had to name the local municipality supplying the permit as additional insured on the policy.

When I progressed to new areas, I sometimes had to produce my current GC license and purchase (gain) a temporary GC license in that municipality just to complete the projects I had planned.

@Jason James  I love this idea! I am a former flipper and wish this was an option at that time. When I was selling the flips myself I never staged as I did the showings and could help the buyer visualize their furnishings in the rooms. But when I incorporated the services of realtors, I bit the bullet and staged for faster sells. Never liked doing it, but found it helpful. Would have chosen the virtual staging option in a heart beat had it been an option.