All Forum Posts by: Michael Henry

@Jason Runkel I think a back of the napkin approach will work best when first presenting to someone you have a relationship with to see if there is interest. You don't want to spend to much time putting a large packet together and they say no. I don't know how many of those you can take before giving up. I would focus on the purchase price, sell price with comps, and cost of rehab, and profit split after closing.  If there is a real interest then you can go into a full scope of work, exact timeline, etc. The last thing is that you should only bring the best deals with good margins projects that have enough meat on the bone to get them excited. 

@Jason Runkel I going to try and explain it in a different way than above. If your money guy or gal keeps turning down deals he either doesn't think you know what you are doing or he is not serious about investing with you. When people are not serious they usually don't have the resources, money, you think they have; this is out of your control. I would confirm with proof of funds that he/she has money. On the other hand, the former is within your control to some degree. If this is your first deal it is very hard to overcome that but you can still show that you are prepared to have a profitable project. 

The 1# one rule to investing is don't lose money. I would focus on this point when preparing a packet for your deals and the team you have in place. If you can't overcome this point all other concerns won't matter. 

Lastly, if this is the first deal you might want to think about offering a greater ROI to your partner to entice him/her to invest. For example, 1-deal 80/20, 2-deal 70/30, 3-deal 50/50 (whatever works for you). Don't worry about the money, in the beginning, the goal is to build a track record of being profitable and getting to the closing table. Once this happens the private lenders will come to you. Then you can get money below 10%.

There are so many different ways you can structure deals which are mainly based on each party's resources and know-how.  Don't be afraid to think outside the box. Let me know if you need more assistants. 

@Steve T. I think you can pull it off. You have to make sure it is a complete win-win. I would not assume that your friend would not want cash flow too. In addition, he doesn't need direct ownership to take advantage of the tax benefits but you might be left exposed if you did it that way, and he passed.  It is very subjective if you chose to go in partnership with your close friend. Inbox me if you need more assistants. 

@Sameer Deshmukh here is a post on BP that should be helpful Long-distance investing. In terms of where to invest, many investors are investing in the midwest in places like Milwaukee, WI. Feel free to inbox me if you have specific questions in terms of how I can be of service to you in Milwaukee. 

@Matt Stefanski you can ask for a tenant ledger if the owner has one. How do you verify the air BnB income? 

@Stephen Lyons because you are from the city, state you plan on investing in many of the normal challenges out-of-state investors face will be no problem for you. I think one of the biggest things you can do it pinpoint 1 or 2 neighborhoods you want to invest in. Depending on your purchase price you will have a lot of neighborhoods to choose from or not many at all. Learn as much as you can about those areas e.g. rents comps, properties sold, condition of those properties, crime, and tenant patterns, property management,  etc. Tenant patterns:  Where I live is a very good school district and it is very hard to find tenants in the middle of the school year whereas in Milwaukee this is not true; you can find tenants all year round. Another example is management, the good companies only focus on certain neighborhoods and the best ones will not even go into an area where their resources are not concentrated. Some of these things you can find out on the internet, many of the other things you will need a local agent help. All ways verify the information someone is telling you. Once you have his information, start writing offers with a trusted agent. 

Good luck. 

@Justin Franklin @Jason Bott is licensed in multiple states not for sure about CA but he is someone that knows what he is doing.  

Partnering up with a contractor seems like a good idea but things can go bad. I would not do the deal unless I had enough money to finish the deal on my own. There are hundreds of ways you can structure the partnership but I would focus on doing a normal contractor's contract with scope of work, timeline, and deadline. I would incorporate that into the VJ agreement with penalties if the deadlines are not met by the contractor.  Another option is to partner with an experienced investor (it usually comes in the form of a loan) where you can learn the business and build your network. 

@George Rodriguez they are probaby referring to how many houses you can sell on your own without a real estate license. If you licensed or hire a licensed real estate agent to sell your flips, it becomes a none issue. 

@Nicholas U. not rushing and waiting for the right opportunity this is one of the trickiest parts about 1031 exchange. See the problem is the best properties have cash buyers or financing in place that is ready to go. See if you can find a buyer on your own and make the offer contingent upon you finding and getting an accepted offer for a 1031 exchange. The market is hot right now so you should be able to find a buyer. The question is will find something that works for you.