All Forum Posts by: Matthew John

I am self-employed for almost 1 year now. A couple months ago I purchased a single family & duplex only a week apart. 

I had to bring 2 different credit partners in (mom and girlfriend) because they had jobs. It was certainly a pain to creatively lock down both deals, but I made it happen & I've made a great ROI on both!

Now I'm looking for more deals, but I lack cash to keep doing it myself. This is where we have to take it a step further and find a Cash AND Credit partner. Don't think I can keep using relatives that won't take equity, but I'm willing to sacrifice some of the reward to continue building my portfolio! 

What also helped was my first few deals. I tell everyone about them and people become interested in real estate & ask if they can do a deal with me. 

@Bob Floss II Thanks Bob. I haven't partnered with anyone on a deal yet or used OPM. I'm confident that I can execute, but convincing someone else to invest 100k or so into a deal for me is a bit nerve racking for them. 

Once the deal is under contract, how do you approach your investors whom have expressed interest in working with you?

@Dennis M. *Broke on paper is much different than being broke, Dennis. 

I have multiple businesses and only pay myself the minimum each year to get by. No where in this thread did I mention I want to work with a traditional lender, I'm seeking private lenders. I have credit partners with good W2 & credit, just seeking more money partners. 

The whole topic is asking what "finding a deal" consists of. I can find deals all day long, but unless it's under contract it doesn't mean anything. My cash partners want to be able to analyze the deal prior to making that decision to invest. My question was...should I just get these deals under contract with an offer & then approach investors?

@Bob Floss II So what's your process when scoping out potential deals?

Before, I did showings at about 30 properties before finding anything that made sense. Would that be a waste of time? Should I just contact the seller with an offer on paper and if they accept, make it official then do a showing with my realtor and start the DD process?

This seems more efficient than going to see 30 different houses to find 1 deal. 

@Karen Rittenhouse My issue is I don't qualify through any traditional methods or this would be a lot easier. I'm broke on paper and I don't have normal W2 income. My only hope is finding a private lender and hard money would only work for value-add properties. 

I have 2 deals under my belt that I funded myself and both were very successful. I suppose if I'm not looking to value add properties and since I'm considering forced value properties (raise rents), then I should be looking for a small money partner and not just a private lender. 

@Karen Rittenhouse Do they primarily look for something that will refinance into a bank loan?

I find deals that might not necessarily fit the BRRRR, but could still produce good cash flow in good shape.

Here's one example - I bought a Duplex that didn't require any work. I bought it for around market value, but was able to force value that added to the rent. Market was renting it at $1370 for both units, I managed to raise rents to $1600 within 1 month. 

This property didn't require rehab that would bring up the ARV and it doesn't make sense to refinance, but it's still a good deal because it cash flows.

I don't believe this situation would work well with hard money. They charge too high of interest rates & they're meant for short term investments or ones you can refinance & pull equity out. 

Thanks guys. 

I am not looking to wholesale. I am looking to BRRRR rentals using other people's money. I already have purchased 3 units with conventional loans, but I have attracted some people who are curious about investing.

These people want me to show them examples before they'd consider giving me money. My problem is, by the time I show them it's usually too late because it'll get scooped up by someone else. 

Maybe I should just submit offers first & see if they get accepted. Then go see the house and price repairs & run it by my list of interested investors. 

@Kayla M. Detroit is much different than the suburbs. I invest in Metro Detroit. Low crime, large population, growing economy, and downtown development in the works. We're the home of GM,Chrysler, and Cadillac HQ.

Downtown has areas that can offer high returns, but the suburbs are a different game. 

It's super hard to gauge what you can get away with. 

I bought a Duplex recently and he was renting for $795 on the bottom, bigger unit. 

Rentometer says $825 is appropriate. My agent said $795 was correct. 

I put up a test Ad right after closing at $925 and received over 70 responses in 24 hours. I took it down, deep cleaned the unit, added handles to the cupboards, and purchased a Modem and added internet for $30/month. 

I then charged the upstairs tenant $25/m to access the internet & relisted it at $1000/month. It took about 3 weeks to get it rented out. I did about 30 showings and had 10 applications. Most people didn't like it was a Duplex, but the house looked better than anything else on the market and it was basically turnkey. 

The previous owner got $1370/month total, I brought that up to $1600/month. 

Moral of the story, it's hard to gauge! I suggest putting out some feeler Ads first. If the house is better than any other house on the market, you can demand above market rent. If the market is saturated, it'll be harder to even get market price for rent. If you don't like the price you're renting at, do a short term lease and try again when it's done! 

@Brandon L. In the BP Podcasts, Brandon mentions this all the time. 

Is this what he's referring to? "Find a deal" = Submitting an offer and getting it under contract and THEN worry about pitching it to Lenders?

If it falls through, is there any obligation or negative repercussions? 

and yes, it's not often I find good deals on MLS. Maybe 1 per week and I check daily.