All Forum Posts by: Jennifer Petrillo

We bought our first flip from a Williams & Williams live auction, had no idea how I was going to finance it, we knew it was a good price and had already estimated rehab costs so I was confident we would find funding if we had a good deal to offer the lenders. Once we won the bid, I went loan shopping with the deal. Auctions in our area typically state "cash only" but we bid and tell them after the fact that we are using a private money loan, they don't seem to care where the money is coming from as long as they get it.

Never understood why this area developed the way it did. We discovered Union Beach this summer while looking for a restaurant, really cute little town with potential, has the nicely maintained Henry Hudson trail running through it (popular for running, hiking and biking), a pretty waterfront with views of Staten Island and Manhattan and some nice houses and townhouse developments near the water. Much of the rest of the town is dumpy, older homes on tiny lots, poorly maintained, ugly. Still some Sandy houses sitting waiting for rehab, too. Highlands is the same--you would expect million dollar homes but there is actually a trailer park right on the water! Once people can afford a nicer home or larger lot, they tend to move out of those areas and the local demographic does not change. My husband says absolutely no to anything that requires flood insurance but I would love to find somewhere to invest at the Jersey Shore. Probably too dicey now with climate change though.

Welcome to BP Jamie! Smart move to choose Texas over NJ, best of luck to you both!

@Account Closed

Check out this great BP article from Chad Carson:

The Simple Math of Early Retirement With Real Estate [With Real-Life Example!]

@Account Closed:

1. There's an opportunity with my funding.

2. There's an opportunity for me to find my own deals

3. There is an opportunity for me to become an agent myself

1. Def use HML, saves you a lot, less upfront costs, as long as you have some cash to cover the interest payments while you hold the property, this will make you more at the end of the day. Form a relationship with one HML and they will be happy to work with you again and again. We started with Ground Floor Finance, they require more upfront but then no payments during the course of the loan, that worked well for us on our first deal. We now work with Rehab Financial Group. Find the deal first then present it to the HML and they will give you the terms they are offering on that deal. They will also do an inspection and an appraisal (that you pay for of course). With HML, have to make sure your GC can wait to get paid; as the work progresses, you will get inspections and take draws of the rehab funds to pay them with.

2. Look on Auction.com, Xome, Williams & Williams, Homepath, even foreclosures on Zillow. We buy most of our properties off the MLS, they are just distressed and have been sitting for a long time, no one else wants them = larger profit margins.

3. Do not become an agent, you don't need to. We use an online MLS listing broker to sell our properties, $400 flat fee gets us on the MLS and our listing looks like everyone else's (not like a FSBO). You don't need a seller's agent, let the realtors bring the buyers to you (most people browse online and pick what they want to see before going out with a realtor anyway). We set a 2.5% commission for the buyer's agent and save thousands of dollars, no seller's agent commission! We use Realmart Realty, not sure if they are in your state.

Great thread, thanks, John!

@Account Closed, why do your flips only make 20K? Just curious, I don't know your local market. We make 40-80K on our flips in central NJ, more importantly we make 50-100% ROI on them. Can you change something about how you approach the flipping side of your business in order to get greater returns in order to invest more money in buy and hold properties sooner and speed up the whole timeline? We have found greater profit margins in distressed properties that have been sitting on the market for a while.

https://www.hudexchange.info/resource/729/sample-development-budget-and-operating-pro-forma-for-a-commercial-and/or-mixeduse-nsp-property/

Plug the numbers into this pro forma to see what your real profit will be. Income and expenses magically change once you see them in writing. I just got an income report from an owner who lives in his multifamily property and he recorded $9000 in rent from his own apartment that he lives in! lol...is he really renting his own apartment to himself and paying himself rent? Interestingly, he was renting his own apartment to himself for a really high rent, higher than any other rent in the building! Easy come, easy go, there will be another one...

Plug your numbers into this pro forma, see what your estimated profit will be, then use the local cap rate to determine how much you should offer for the property. They can't argue with numbers. Also, tighten up your rehab budget so you can use it to lower your offering price also.

https://www.hudexchange.info/resource/729/sample-development-budget-and-operating-pro-forma-for-a-commercial-and/or-mixeduse-nsp-property/

@Tony Kim, You should throw out that question to the white coat investor forum, much more sophisticated investors on there than myself!

@Felicia Gauthier please read this article on whole life, one of the worst investments anyone can make:

https://www.whitecoatinvestor.com/debunking-the-myths-of-whole-life-insurance/

@Joshua D., you both play on the same offensive line, you just have different roles. A lot of it is perception. If you asked my husband what I do all day, he could say that I sit in an air conditioned office and have a leisurely paced schedule and have complete mastery of everything I am doing. If you asked me what I do all day, I could say I drive 45 minutes to work (a boring and wasteful use of my precious time), have constant in person and telephone interruptions all day long and make decisions that have life-altering implications. If you asked me what he does all day long, I could say that he wakes up when he feels like it, sets his own schedule and gets to go to the beach or fishing whenever he wants to. He could say that he manages contractors, hammers out rehab details, goes to Home Depot a lot and works in hot filthy smelly buildings. Fortunately, we both have our eyes on the prize and recognize the vital contribution each is making to the Big Goal. That said, he does have more free time than I do and it is amazing when I get home and the house is clean, dinner is cooking and we can enjoy a chore-free evening. His taking care of our home life enables me to relax more from my stressful W2 job which allows us to pour more into our investments and so on....