All Forum Posts by: Gerardo Dominguez

@Phi Bui  Welcome to BP!  Give us some details on the seminar.  Who/ What/ Where/ etc?  Was it helpful?  How much upselling?  What useful information did you gain?  Don't leave us in suspense!  :)

@James Bitakis for flips you should use the 70% rule; see link and formula below. Your closing/holding costs and profit will come out of the remaining 30%. Or you could lower your max offer to account for your closing/holding costs. If you stay at 70% all in, or less, you also leave the option of a cash out Refi on the table. So if, worst case scenario, you can't sell it you can rent it out and put a mortgage on it to recoup your costs. So run your numbers conservatively; overestimate repairs and underestimate ARV. Make your offer based on your analysis not based on what your realtor thinks. Good luck and keep us posted!

(ARV * .70) - Rehab Costs = Max Offer

https://www.biggerpockets.com/renewsblog/2012/11/0...

I think it's time to open a Chicago office.  Just saying.

@Benjamin Voorhis Welcome to BP!  Good luck w/ your investing.

1) You can use "skip tracing" services.  Basically, you pay a service provider to find the contact info for you.  You should try searching online first.  You might be able to find their info yourself.

2) First, tell them you're an investor in the area and are interested in buying their property.  Then, make sure to build a report with the seller.  Find out their motivation and present yourself as someone who's going to solve their problem(s).  Also, have a good answer for when they ask, "how did you get my number?" You're essentially cold calling them so they'll likely start off on the defensive.

Hi and Welcome to BP @Dutch Smythe! It seems like you're a cashflow investor so it would make more sense to keep the cashflowing properties. Since property 1 is generating a loss every month I think you're making the right move by selling it. You should compare the ROI of paying off a debt or using the profit from this sale to buy another cashflowing property.

@Jeremy Lerner  Welcome to BP!  Each deal/ investor/ market is different so that's a hard question to answer.  Hard Money Lenders typically charge 10-18%.  Private money lenders are typically less but they IR's can vary as well.  If you're not using your own money be mindful of the cost of borrowing money.  Not just the IR itself, but some lenders will also charge points upfront.  Make sure to include these costs in your analysis before going into a deal.   Personally, I would recommend NOT borrowing from friends/ family until you have enough deals under your belt to feel confident in your investing abilities.  Good luck!

@Robert Muzyka The next step is analysis. Find your ARV, Rehab, holding costs, etc. Are you able to enter the property? If not, maybe you should create a range for the repair costs (as in best case/ worst case scenario)? What's your entry strategy? Exit strategy? Once you run the numbers and it still looks like you have a good deal, THEN you should contact the owner. Good luck!

@Ray San Miguel It depends. Some expenses you can estimate on your own. Others you'll have to look at the owners records to confirm. For example, for utilities, what does the owner pay? How much does the owner pay for Insurance? You can get a good idea of most costs by knowing your area and doing some basic searches online. For example, most counties post tax records online so you can find out how much a tax bill will be for your potential property. Also, don't forget to allocate some percentage of your gross rents to your "landlording" expenses; CapEx/ Repairs/ Reserves/ Property Management.

@James Schoen Depends on how you structured the deal. Look up the "BRRRR" strategy on this site. I think that'll help answer your question. Good luck in your investing!

@Ray San Miguel Look around on BP for a webinar that @Brandon Turner did a while back. He walks us through step by step on how to analyze a deal. Off the top of my head I suggest looking around BP, and Google as needed, to learn the various calculations needed to analyze an investment. I've included some basic ones below. Once you have your numbers you have to answer some fundamental questions to determine if a deal is worthwhile; How much CF do I want? How much of a CoC% do I want? But these are questions that only you can answer. Hope this helps!

Gross Rental Income (Yr) - Expenses (Yr) = Net Operating Income (NOI)

NOI - Debt Services (aka your loan payment) = Cash Flow (CF)

CF / Initial Investment (aka your Out Of Pocket Costs) = Cash on Cash Return (CoC%)