All Forum Posts by: Jeff Schemmel

@Meng Chen winter getting better?! Man, I feel it in my bones when it gets cold but that doesn't stop me from loving this place! I'm investing here for life.

Hey @Brendan Davis I noticed you hadn't received a response yet.  At first, I didn't expect I was the best person to reply here, given your questions were about private lending and how to trust a private lender.  I haven't utilized private lending personally, but I know several people who have and who ARE private lenders and so I figured I would just explain how I met those people, and perhaps that is helpful.

I wonder if you've done your own multi-family deal yet? I have found that helps establish rapport, and credibility, and gives a client some idea of what my experience is/has been. Doing my own deals has also dramatically increased my networking capability. having done it, got my hands very dirty, and experienced full-cycle of tenant management, property management, and rehabs - I can actually answer most of those types of questions. I have friends now who are in just about every space I could need an "expert" in. Lending, contracting, electrician, plumbing, architecture, commercial investing, private lending, BRRRs & rehabs, HELOC lending, you name it. Without having done deals, I wouldn't have had nearly as much of a reason to start and build deeper and more meaningful relationships with these types of people. A lot of them I've either paid to do work, met on a referral, helped with a deal, or some other way of supporting them - and that's what it's all about.

As far as who to trust, I think my message is clear already.  If I've built a relationship with someone in this real estate arena, it's because we demonstrated to each other we are trustworthy to some degree, and in order to maintain that relationship, we put effort into maintaining that trust.  For example, I don't just send my trusted electrician to any random person who claims to want one "ASAP".  I want my electrician friend to work with people who have jobs within his scope and who are reasonable to work with.  Because I've looked out for him in this way, he has called to thank me for making sure I send him only to great clients and offered to do favors for me on my duplex.  The same goes for private lenders.  They want to build relationships with people that understand how they work, and they want to work with people who are serious and thoughtful.  I would just keep that in mind as you network.

Try to do deals for yourself if you haven't already, and I think you'll be pleasantly surprised at what that does for your career :)  Hope this helps!

@Grigoriy Gorshteyn

@Rafael Perez I think it's a great idea.  There's extra value there to help bring those types of people together with common interests.  There's a similar trend with "gaming houses".  What I wonder, though, is how might this change your attitude or estimates around vacancy?  Entrepreneurs love to chase shiney things, and none of them have stable lives and that includes moving wherever the need is.  I could see that causing you a little more turnover than normal, but perhaps not more than college students.  What's your thought on what the house itself may need to properly support this type of environment?  Do you need rooms that act as a "think tank" or "mastermind" area, or do you need rooms that promote relaxation or some recreation that a family home might not otherwise have?  What resources are you going to provide?

My mind went a little deep in this and I typed about half of my thoughts here before I thought I could have a slightly different vision than you.  I think it's a cool idea and you should do it.

shooting from the hip, here... but was it the "vacuum your truck" guy?  If so it's Bryce Stewart in episode 442.  he was also a guest on 276.  he says "have your workers sign a worker's comp waiver form".  51:36 into the video.  cheers...

 excellent post @Trevor J Dammon I haven't been in this property, but my general stance on these situations where you want to look at adding another unit is: you cannot depend on making that additional space to make the deal work - it should pencil out without that.  I say that because being successful in getting these spaces to conform to new building code standards is very involved.  I speak with zoning and building inspection in Minneapolis frequently and the biggest things are 1.) 1 hour fire barrier, 2.) coforming egress (escape routes), and on 3rd floor areas you need 2, and 3.) zoning, which includes a whole myriad of detailed constraints.  It's super lengthy, permit-intensive, and cost prohibitive to add value in these ways in MOST situations.

Ultimately, unless you have a building inspector come out and literally spell out for you what you need to do, it's going to be really difficult and time-consuming to identify everything the property will need to confirm that additional living space.    IF it's just adding a bedroom by putting up a wall and moving some elctrical/hvac, or an egress window that's much more realistic.  

Ask your realtor, if you have one, about zoning and for resources on the building code and for the contacts.  A quick google search on the property ID will shed a lot of light for you - it's all public info.  You can find permits, zoning, rental licensing, tish reports, etc all online with that PID.  Your realtor can provide contacts like contractors, for example, who can help you make decisions when estimating rehab costs or time requirements or what permits need to be done.  You take on a lot of risk doing a deal like this and depending on it to cash flow property so just try to focus on a deal without these extra spaces and look at them as potential icing on the cake later if it works out.

Reach out anytime!

@Tanner Weaver @Daniel Anshus is your guy, you'll be in good hands.  As @Evan Kraljic and Dan have already said you're in such a great spot to start and do it right.  You've got solid employment, you've saved a wad of cash and you're ahead of the curve - use a low-down option if you can on your first property.  Househacking is an excellent way to start learning property management/tenant management at a lighter-pace, and I always encourage people I work with to start by self-managing if it's at all possible.  One day you'll want to hire a PM and you'll want to know what's involved and get through a few projects and situations on your on to know when a PM is good or not when you do start interviewing them - that's so important.  You'll build a "rolodex" of contacts with people like Dan and Evan, contractors, lenders, etc and others around you.  Just surround yourself with people who are doing what you want to do and help each other out.  Happy to help if I can.

 I had a lender text me today about a new 15% down option for single-family investment properties that she had just been notified about being able to offer locally here in Minnesota.

 @Aldrin Gacuya sorry I couldn't tell ya!  I'm not a lender and that stuff changes daily.  If you DM me I can put you in touch with a lender in the Chicago area that does them and you can talk to him about it.

@Brad Hunton did you inspect before buying?  I'm curious what the small problems you fixed were and what your rents are today.