All Forum Posts by: John McDonald

Kate,

throw a dart at a map of texas and you'll find opportunity. I moved from California a few years ago and one of the best features of texas is lack of ******** red tape that you find slowing down your projects in California. This is the new wild west. Opportunity is everywhere. 

I'm in Dallas. Reach out if you have specific questions about the area.

Good luck.

Do not pause the degree. You will never go back. It's a huge accomplishment and it's always best not to put all your eggs in one basket. You never know where this country is going in the next 50 years. Congratulations on being ahead of 99% of your peers. I would look into finding a home near a hospital and rent the rooms out to traveling nurses in Utah with a partner. Find a place that needs very little work. There are pros and cons. Just do your research and see if this is a viable option. Keep us updated. Looking forward to watching your progress.

I would get a second lawyer's opinion.

 I couldn't agree more with this. Just the word "free" is your first step. Set it up like a garage sale and be on site. Besides Facebook marketplace also put up signs. 

The second move is donation centers. Google in your area and call to see if they will pick up for free. 

For anything that doesn't get taken then rent a Uhaul and take the rest to the dump.

Jumping into the real estate flipping in Newark, NJ is a good plan. Now, when it comes to building a duplex or a multifamily unit, it's a bit more complex, especially if you're new.

Building from scratch means you're looking at construction loans. These aren't your typical loans; they're a bit more involved. You need a detailed plan, good credit, and sometimes a bit more upfront cash. Plus, they turn into regular mortgages later, which adds another layer to think about. Diving into building a duplex might be a bit like jumping into the deep end. You've got to juggle stuff like getting permits, dealing with construction crews, and making sure everything stays on budget and schedule. It's a lot more than just buying and fixing up a place.

Start with fixing and flipping. It's a simpler way to get your feet wet without the heavy lifting that comes with building from the ground up. You learn the ropes, understand the market, and then maybe tackle the bigger projects after a few years of experience and a team of contractors and professionals that you know are reliable.

Really sorry to hear about the tough spot you're in. Defaulting on a hard money loan is a tricky situation, especially with a lien involved. When it comes to the impact on your credit, it can be significant. Defaulting on a loan typically leads to a drop in your credit score, which can affect your ability to secure financing in the future. It's a bit like a red flag to lenders that you've had trouble paying back a loan in the past.

Now, about the lender forcing you to sell your personal real estate – it's a possibility if you personally guaranteed the loan. When you personally guarantee a loan, you're essentially pledging your assets (like your home) as security. So, if things go south, the lender might have the right to go after these assets.

It's crucial to talk to a real estate attorney ASAP. They can give you specific advice based on the details of your loan and situation. Also, open up a conversation with your lender. Sometimes they're willing to work out a deal or a payment plan, rather than going through the hassle and expense of seizing assets.

And remember, this isn't the end of the road. Many successful investors have faced setbacks and bounced back. Learn from this experience and use it to make smarter moves in the future. Best of luck!

Let's explore why single-family homes might be a smarter investment in the DFW market, especially when considering renting to traveling nurses:

Market Availability: The DFW real estate market has a higher availability of single-family homes compared to multifamily units. This increased availability not only makes it easier to find suitable properties but also offers a wider range of options in terms of location, price, and property features.

Lower Down Payment: Single-family homes typically require a lower down payment compared to multifamily properties, making them more accessible, especially for new investors. This lower financial barrier to entry can be crucial when you are starting your investment journey.

Renting to Traveling Nurses: Single-family homes with multiple bedrooms and bathrooms present an excellent opportunity to rent to traveling nurses, especially if the property is near major hospitals. Nurses tend to be reliable tenants who take good care of the property. Furthermore, they have stable incomes, ensuring that rent collection is consistent and reliable.

Adapting to Market Needs: Given the increasing demand for healthcare services and the corresponding need for traveling nurses, properties that cater to this demographic are likely to remain in high demand. Renting individual rooms with private bathrooms in a single-family home can maximize rental income while meeting the specific needs of these tenants.

Flexibility and Resale Value: Single-family homes generally offer more flexibility in terms of exit strategies. They can be easily sold or rented out to families if you decide to change your investment approach. Additionally, single-family homes often have a broader appeal in the resale market, potentially leading to better appreciation over time.

Simpler Management: Managing a single-family home is typically less complex than a multifamily property, especially for new investors. This simplicity can be a significant advantage as you learn the ropes of property management.

Hi Ron, I use chatGPT from time to time to clean up my content and check spelling and grammer. The content is written by me and checked by various tools.

Cheers,

1. I agree with the other comments, walk away if this is going to stretch you thin. With that said, here are your options:
2. FHA 203(k) Loan: This is another type of renovation loan, similar to the HomeStyle and CHOICE loans, but it's backed by the Federal Housing Administration (FHA). It allows homebuyers to finance both the purchase of a house and the cost of its rehabilitation through a single mortgage. The down payment can be as low as 3.5%, but this loan has certain limitations and requirements, including restrictions on the types of renovations and a cap on the total loan amount.
3. Bridge Loans: A bridge loan is a short-term loan used until a person or company secures permanent financing. It can provide immediate cash flow and is typically backed by some form of collateral, such as real estate. This could be a viable option if you plan to refinance into a long-term mortgage after the rehab is complete.
4. Home Equity Line of Credit (HELOC): If you currently own another property with substantial equity, you could consider a HELOC. This option allows you to borrow against the equity in your existing home and use those funds for the purchase or renovation of the new property.
5. Private Money Lenders: As you're aware, private lenders can be a source of funding, albeit typically at a higher interest rate. They can be more flexible than traditional financing options and may be more willing to fund projects that conventional lenders shy away from.
6. Partnership or Joint Ventures: You could consider partnering with another investor. In such an arrangement, you might contribute the property and your labor, while the partner contributes the needed capital. This can be a complex arrangement and should be entered into with clear terms and legal advice.
7. Government Grants or Programs: Sometimes, local or state governments offer grants, subsidies, or programs for homebuyers or renovators, especially in areas they are looking to develop. It's worth researching if there are any such programs in your area.

Addressing the issue of changing the scope of work (SOW) during a flip project financed by hard money loans involves several specific steps:

Detailed Initial Assessment: Before finalizing your SOW, conduct a thorough inspection of the property. This might mean investing more time or bringing in various specialists (like structural engineers, plumbers, electricians) to identify potential hidden problems before submitting the initial SOW. This approach can minimize surprises once work begins.

Flexible SOW with Contingencies: When drafting your SOW, include potential contingencies for common issues that might arise during the renovation. This way, you have pre-approval for certain types of additional work and won’t need to renegotiate the SOW for every change.

Regular Communication with the Lender: Establish a clear line of communication with your lender. When unexpected issues arise, update them immediately. This might involve submitting a revised SOW or providing additional documentation to justify the changes and additional costs.

Documentation and Evidence: Document every step of the renovation, especially when unexpected issues arise. Take photos, keep receipts, and maintain detailed records. This evidence can be crucial when negotiating additional funding with your lender.

Scheduled Inspections and Progress Reports: Coordinate with your lender’s inspector to schedule regular inspections. During these inspections, present your documented changes and explain why they were necessary. Regular updates can keep the lender informed and more receptive to approving additional funds.

Negotiate a Flexible Draw Schedule: When negotiating the loan terms, try to include a more flexible draw schedule. This could involve more frequent draws or draws based on milestones rather than a fixed schedule, allowing for more adaptability to changes in the project.

Seek Legal or Financial Advice: Consult with a legal or financial professional who specializes in real estate investment. They can provide advice on negotiating terms with hard money lenders and might suggest strategies to better protect your interests in future deals.