All Forum Posts by: Lee Ripma

@Dan Krupa

I used someone I won't use again for my last deal! 

You’re really going to need to model all repairs before you buy. Think about the sf of each unit you will renovate, what you’re going to do, and what the cost is. Also you need true costs for exterior repairs like painting and roofs, a percentage won’t work. I paid for a spreadsheet from Michael Blank of on modeling all this stuff. His is really for very large MF, smaller MF that you’re just buying for yourself is different. PM me and I’ll send you a modified spreadsheet I made.

It sounds like you’ve already got a ton of equity in this deal. I would make this property your first flip so you can showcase it to investors/lenders in the future. Really do it up for top dollar. Adriel Liwag is a local flipper and really nice, I’m sure he’d come take a look and advise. Your limiting factor is going to be finding deals to flip in LA so you really want to make sure this one looks good. I personally would use the money to flip in lower priced areas where it is easier to find deals, some local-ish areas I think are good include: Rialto, Yucca Valley, Bishop. You could also flip in Boyle Heights and East LA as populations are moving east. Good luck and keep us posted!

I’m in the great idea camp. They are being totally honest and upfront with you and are even providing their own lease, and they have good credit. Lots of folks have alternative sources of employment including Airbnb hosting and freelance marketing. I would tell them that you’ll do it with them for one year and you want a 20% cut of their profit or you want to change them higher rent. There will be more wear and tear on your place so I think getting premium rent or a cut is fair. I would look at their reviews, look at their credit, judge them as people, and make the call. From what you have said I would do it. They are the ones dealing with the headaches, you’re getting more rent, they could potentially even partner with you in the future to do this on more units. Let us know what you decide!

I’ve been interviewing CPAs who can help me maximize deductions from my RE and after my experience I think $750 is very low cost. Most of the folks I have talked with want 3-4K for their “tax strategy” yearly and are charging 1200 for a personal return and 1400 for EACH LLC return. It’s ridiculous so I’m still looking. If the guy you’re talking about is good, responsive, helping you plan for taxes ahead of time and does all your returns for 750 I think you’re getting a good deal!

@Peter Sinclair Looks awesome! Very impressed with your final product and very cool that you did a lot of the work yourself to keep costs down. Would you mind sharing where you got your materials? Was it all Home Depot, Lowes, and IKEA or did you order some of the products direct? Are the cabinets RTA? Did you put the softclose hardware in? Love your look and just did something similar in Kansas City. Once my refi goes through I'm going to post a BP success story about it. I want to duplicate it on a larger scale making very livable small units with modern finishes. Looking at specing out all the materials right now and would love to hear where you got some of yours! Really great work! 

I used rentometer.You just put in the address and the number of beds and baths. It will show you all the rental comps and give you a good idea of the fair market rent. 

@Mitch Smith

I've had a similar experience with a contractor in Kansas City. It's just so hard to find those that you trust. Even when you vet them sometimes it isn't enough. I agree with you that it's worth it to invest out of state! 

@Nathan Diones

Very cool on the Yucca Valley apartments! 

I think that "standard" hard money rates would be 12% and 4 points, a great deal would be 10% and 3 points. These guys are advertising less points but then in the end their points are truly right around 3. 10% and 3 points is actually not bad for hard money. They also make sure they get their interest for the first three months. I would just think of these fees as points. If you don't have any other option, use them. If you can find a private money lender at 10% at no points, that would be much better!