All Forum Posts by: Moises R Cosme

Jamie, 

This is awesome!!!  Congrats.  When I was responding to your post, your post had not loaded so I assume it was a question as to the process.  Congrats!!!  

I assume you are looking for steps:

1. Prospect for deal

2. Run numbers 

3. Secure financing

4. Make an offer

5. Once your offer is accepted, re inspect the property top to bottom.  You want the second inspection to get you solid numbers for your renovation.

6. Close

7. Take the first 3 to 5 days to lock down your numbers, get the contractors in the property to get solid numbers.  Do not rush this step, you are better off taking a week or two to get through this preparation stage than rushing it.  By taking time to really lock down numbers you will give yourself maximum opportunity to make adjustments to your original plan.  What you see on flip TV shows are an excellent example, often times you see those guys discovering plumbing or electrical issues that forces them to increase their renovation budget mid way through the project.  If you discover these issues early, instead of increasing your budget you can simply adjust your renovation by scaling it down.  In the end you may decide to increase your budget, but making sure you take your time once you have the property will save you a lot of time and a lot of money in the long run.

8. Renovation in sequence:  Roof, exterior paint/siding, plumbing, heat/central air, electrical, floors, kitchen, bathrooms, interior paint, finishes.

9. Get property to market.  I highly recommend setting your list price when you purchase the project & layout your renovation; you should not be adjusting your resale price during the course of the project.

10. Property is sold:  audit your project.  Where did you find?  What process did you go through to evaluate it?  What did it take to close the deal?  How did you get the financing?  What process did you go through for the renovation?  What contractors did you work with?  Which of them do you want to work with again?  What went wrong?  What did you do wrong?  What did you do right?  How much money did you make?  How close were your estimates to your results?  

I hope this helps. 

1. Auction Site #1: no auctions until 8/31/2020

2. Auction Site #2: single family, 1955 build, 3 bed, 1 bath, 980 sq feet - I expect the bank to buy this back for $180,000+, this was a previous short sale that failed to sell; I will keep an eye on it.  Anything over $125,000 is too much

3. Expired listings: nothing interesting

4. Two family, 1940 build, outside home markets: reasonably priced, two-family with income potential. This is an REO asset with an Agent we have worked with in the past. It is a post 1940 build, rents likely in the $900/unit range. Will look into this further today.

5. Three family (outside home markets): reasonably priced 3 family; this is pretty attractive. Lockbox code is XXXX on the front door. Wednesday 4pm. REO property, there is a multiple offer form already so we should sit out for a couple of weeks & see what happens.

6. Single family, 1940 build, 2 bed & 1 bath (outside home markets): this looks to be a better version of another purchase in our active pipeline., does not look to need much work. Lockbox code: XXXX. 11am, Thursday 7/2/2020.

7. Two family 1 & Two family 2; outside home markets - these listings have been on the market forever; reached out to the Agent to see if he is open to working with us. Our offers would start at $60,000 but I will volunteer to help him get the transactions done; it would be a dream if he were open to moving the files to our preferred processor for work

8. Auction Website: single family in home market that is available is occupied; no need to investigate any further.

Adrian, 

Here are the downsides to investing in mobile homes:

1. You do not own the land, so there is a significant portion of your monthly expenses that you will not control.  Mobile home parks have become a favorite investment vehicle for hedge funds, the reason they like mobile home parks so much is because they can leverage the owners (they own the land & you cannot actual move the mobile home).

2. There is no upside from a capital appreciation standpoint; mobile homes lose value over time, as compared to real property.

@ Frank Rolfe has good advice and his post reflects experience in this area.  

A follow up question:  what are the numbers?  How much are you buying for?  How much is your 'all-in' payment monthly?  How much do you expect to collect for rent?  How much do you expect to spend on renovations?  

Not looking to discourage you, I just want to offer you a different perspective.  BP does an amazing job of introducing concepts and ideas, but there is not a lot of discussion about the downside risks.  I hope this helps!!!  Feel free to message me if you want additional thoughts on this subject or any other. 

Derrick, 

I have done a few BRRR, here was my process:

1. Purchase distressed with hard money

2. Renovate with hard money (our average rehab takes 90+ days)

3. I then hold for additional 60 days, apply for a personal mortgage & refi out

BRRR is not a quick strategy (relatively speaking). If you refinance out with a USDA loan you may be able to avoid the 6 month's of seasoning, I just did a rehab a couple of months ago and sold it to a couple using USDA; USDA had no seasoning requirement. USDA loans are for rural areas BUT you would be surprised what they consider rural; the USDA route is the best I can think of to get around the seasoning period.

I hope this helps. 

Freddy, 

1. You should have a pretty good number before you make the purchase, otherwise, it will be impossible for you to determine whether the property is a good investment or not

2. You should get familiar with normal and usual costs for standard repairs in your market; most contractors only want to go out to a property and generate a quote for you, once they know they are going to get hired for the job.

Check out the BP library, there's a book on repair costs - it will give you a good starting point for getting estimates together. 

Why didn't you just payoff the lien through the purchase?  

Wholesaling is tricky for licensees; we do not do it, because the mechanics of it seem to be in conflict with the standard listing & selling process that allows us to make a commission.  We will buy a property outright and resell it without renovation if possible, we consider that a wholesale but we always take possession.

Long & short:  I agree with you, wholesaling, particularly for a licensee is problematic

Dramatic improvement.  What do the kitchens look like for comparable properties that have sold at your desired price point?  

1. Roof

2. Heating

3. Plumbing

4. Electrical

5. Exterior paint/siding

6. Kitchen & bathrooms

7. Flooring

8. Interior paint

I agree that experience is the best teacher, but people should place emphasis on understanding fundamentals - you can get that acclimated with basics from reading.