All Forum Posts by: Kyle McCorkel

@Brad Baker

I bought the 3 unit from @David Krulac :)

I do a lot of marketing to distressed properties and I’ve been able to help other investors out from time to time. DM me if you want to meet up sometime.

@James Zito

Congrats on the Harrisburg deal!

@Stephen Gimber

Welcome to BP! I’m up in Hummelstown. Love the Lititz area.

I've been marketing to probates for the past 6 months with limited success.  Recently I've begun revamping my marketing and will be using a direct mail service to send out multiple monthly mailings (for 6 to 12 months) to each lead.

The direct mail service has a 200 piece minimum.  Each week I get about 25 new leads.

So my simple question is this: how important is it to mail the executors IMMEDIATELY after they form the estate with the county? If I want to use the direct mail service, I'd have to wait about 8 weeks to send out a new batch.  Should I be concerned about timing for the 6, 7, 8 week old leads? I feel like many of them could have sold or listed in that time.

Any suggestions?

“It is not the critic who counts; not the man who points out how the strong man stumbles, or where the doer of deeds could have done them better. The credit belongs to the man who is actually in the arena, whose face is marred by dust and sweat and blood; who strives valiantly; who errs, who comes short again and again, because there is no effort without error and shortcoming; but who does actually strive to do the deeds; who knows great enthusiasms, the great devotions; who spends himself in a worthy cause; who at the best knows in the end the triumph of high achievement, and who at the worst, if he fails, at least fails while daring greatly, so that his place shall never be with those cold and timid souls who neither know victory nor defeat.”

Theodore Roosevelt

@Jameliah Cunningham

Here’s my perspective, as a lifetime Hershey resident: Central PA is a great place to invest with stable employment from multiple industries (a 10% lay-off from Hershey foods didn’t even make a dent). Plus the cost of living is very low.

Hershey itself is largely A+ class homes and is 50%+ higher priced than most of the surrounding areas. It is nearly impossible to cash flow at these prices even with slightly higher rents. Plus, our property taxes are much higher than surrounding areas as well.

There are some junky areas of Hershey that are cheaper, but there’s a reason for it that is inherently tied to the location (close to railroad tracks, close to Hershey Foods plant, close to sewer treatment plant, etc). While you still are in the coveted Hershey schools I still would not touch these areas since there is zero chance of appreciation due to the terrible location.

Bottom line is, don't overpay and don't settle for zero cash flow just to be in Hershey schools. Now, if you can find a place needing work (warning: everybody else is looking for this too) then you could make out well with a flip or possibly a BRRRR.

My recommendation is to look into the surrounding areas around Hershey. Palmyra (watch out for sinkholes!), Hummelstown, and parts of Harrisburg that aren’t in the city school district. Further away, the West Shore and Lancaster county are largely excellent places to invest as well.

@Jason Hendrickson

Thanks!

The one benefit to the fee structure is this makes the business scalable to the point where we could take on investors and still make money off fees for our time.

I've been working with a GC on several different rehabs (BRRRR's and 1 flip), and he's done an awesome job. He's got a crew of highly skilled guys and also has a network of subcontractors and he just gets stuff done - high quality and fast. After working with him the last 2 years and getting to know him, found out he's also an investor and has completed several BRRRR's of his own.

He's my age and has similar goals and values as me.  Business savvy, reasonable, and wants to treat people right.  You learn these things about people after working with them in multiple situations.

We've realized that we each have specific and complementary strengths: he is obviously good at construction and also property/tenant management.  I'm good/better at finding deals, financing them with short term cash, and refinancing or selling.

We've decided to partner up so we can each focus on our strengths.  Our vision would be if I can focus on finding deals and money we can increase deal flow and he can just focus on cranking out the work.

We have a deal under contract.  We've discussed how to structure our partnership conceptually, but now that we've got a deal it's time to iron out all the details and write a formal Operating Agreement with an attorney.  Please review the below initial ideas below, and of course feedback and advice would be appreciated!

• 50/50 split - we each fund the business with an equal amount of cash
• I handle marketing, evaluating and finding deals, offers, financing, bookkeeping, taxes, legal and admin
• He handles everything hands-on: initial rehab and (if it's a BRRRR) finding tenants, maintenance, collecting rent, evicting tenants if needed, etc.
• We are starting to talk about fee structure for the major items of the deal.
  • 5-10% (of rehab cost) project management fee for rehab - would go to him
  • 3-5% (of purchase price) acquisition & setup fee for each new acquisition - would go to me
  • 8% of rent collected would go to him for hands on aspect of PM
  • 2% of rent collected would go to me for managing bookkeeping, taxes, legal, and admin
• After paying fees we would split the remainder cash flow and equity 50/50
• We can each take owner distributions at our discretion but need to maintain a minimum cash reserves (say, $10k per property)
• Exit strategy: we have talked about outlining a few options for exiting the partnership.  One would obviously be to liquidate properties.  Another would be different buyout options.  So let's say the business has $1M in equity in 10 years, one of us could buy the other out for $500k.  If we don't have that cash on hand, then we could work out a note where the $500k is payed out monthly with interest over the course of 10 years or so.

I have been thinking a lot about this lately. I was in your shoes one or two years ago. Just could not find any deals. Then when I did they slipped thru my fingers.

Brings me back to when I was 12 and deer hunting with my dad for the first time. I remember asking “Why do we see so many deer? Why don’t we see squirrels or rabbits or foxes or any other animals?” He said “Because we are LOOKING for deer!” (Duh)

Once you learn what to look for and where to look it becomes so much easier. Learn who the ideal seller is, then how to contact them. Then of course, how to execute on the deal.

Then you’ll get to a point where you’re seeing deals everywhere. You won’t get all of them, but you’ll see the potential.

It’s easier said than done but you learn these things through experience. Do one deal and maybe you don’t get all your money back. No problem - you should expect that and build contingencies around that - learn some lessons and move on to the next one.

After you do a few you’ll learn a ton and everybody will want to lend you money on your next project.