All Forum Posts by: Natalie Schanne

@Debra Irvine - can you rent the property while you figure it out, and cash out that hard money lender somehow with a permanent loan on your rental-rehab?

A septic company should clear it up pretty quickly for you. Ask one to come pump it for you.

Seems like the cesspool is concrete and will constantly be draining into the surrounding ground.

@Rumen Mladenov - I’m not sure. I bought the property and immediately replaced the toilet and nothing else. The subfloor around the toilet was flexible and the tile had cracked. After the toilet was changed, it didn’t do that anymore and the subfloor stopped flexing. When I bought the property, it had been vacant for 2-3 months. But now that I think about it, you’re right that toilet water isn’t just leaking there non stop if you’re not flushing. 

@Dennis Soto - calculate what’s a better deal for you. Partnering with them or getting hard money and just paying them flat. I would rather, if I’m partnering with a contractor 50/50, I’d throw in my commission and I’d ask them to throw in their services such that I was only paying straight up COST for their services (materials, potentially staff labor) without the added GC profit. If that means the owner doesn’t put any “free labor” into fixing up the house, maybe it’s not a good fit. So for example, if I’m partnering with my favorite carpenter, I would expect all windows can be changed for $200-250/each versus $450 all in.

Otherwise, how do you know you’re not in the deal and he’s force-gouging you on his services as well? Like, yes these windows are $500 each. Or this bathroom remodel will be $7000 labor (even though it’s 3 days and $1500 of materials).

I’ve heard of some partnerships where the GC included all labor (owner and his helper guys) as part of his share. It really depends on the cash flow situation.

@Michael White - one way to win properties is to get them off market before they’re listed. For example, if you want a condo in a particular neighborhood, send postcards or letters to every owner in that neighborhood. (You May choose to do absentee owners only - properties that are rentals - and people who have owned for 5+ years or have substantial equity). I have a virtual assistant for $6/hour cold calling on a list of people in my area (found on propstream) who owe tax liens or are in pre foreclosure. I also have her calling people who are high equity (paid cash) and absentee owners (possibly tired landlords, possibly vacant properties). For about $50 in time, she comes up with a new motivated seller daily and it’s up to me to close that contract. It’s also possible if someone owns a property you want - they can sell to you subject to their loan or they can seller finance the property to you.

@Daniel Kosciuszko - I always want to buy within 30 minutes of where I’m working. The closer the better. Real estate is about location, location, location. So if you get a 2-4 unit close to your job you can always Airbnb the other apts for supercharged rent and/or self manage. I have done very well by having furnished properties close to well paying jobs. I’d rather have a more expensive property that I have to fix up within 15 mins of cool stuff than a mansion an hour away. Renting is easier. Appreciation is often higher. My friend tells me a story about how he had two commercial properties for $400k, one in Hoboken and one in Easton pa. Today his Easton pa property is worth about the same $400k 20 years later and the Hoboken property is worth over $1m last time it sold.

@Kimarley Gayle - Hello! I'm working with several vets who are using their VA loan to get financing for their homes. The trickiest part will be finding you a good deal. If you can get into a 3-4 unit, it will be a great investment opportunity (subject to the numbers). Remember a lot of multifamilies in New Jersey are quite old properties so if you're renting any kind of luxury apartment, it will be a shell shock until you renovate it.

@Steve Miklashevskiy - if roof is not apparently leaking from inside the attic, why would you replace it?? I have a 3 tab shingle roof that looks old because it’s out of fashion but was installed in 2010, so it’s only 11 years old and hopefully would last 20-30 years. The estimates home inspectors give are rarely right. It is quite often that sellers with solar leases have to sell for much less or provide an equivalent of the lease payoff as a credit.

@Mitchell Pudelski - I didn’t see anyone say it, so I’ll recommend you or the tenant call the township or water company to say you found a leak and to give you a one time credit on the bill. I just bought a duplex with a rotted bottom flange so the bottom was leaking into the crawl space (basement) and onto the floor every flush. The bills were high accordingly. Previous landlord didn’t know or take action when the water bills he paid were very high. So now I have a $100 quarterly water bill and a $400 six month sewer bill (because it’s going off last years higher previous usage from the leak).

I also had a water bill that was $300/qtr when I had a dripping hose bib. After I fixed it, back to 150/qtr.

I have the same issue with my chain getting caught in my flapper in my mbr bath . I have to pay attention for it and jiggle it like I’m flushing it. Obviously only people who pay the bills care, which is why if your tenant goes crying to the town they may cut a break.

@Shelby LeBlanc - I’m sorry to hear you’re in this pickle. I would find and reach out to a) my local reia and find out if there’s a newbie flipper who wants to help in exchange for some experience and equity, b) reach out to a new or experienced real estate agent who would loan money plus get the listing.

See what if anything you can get done on credit such that you can pay them at closing, like a credit with the granite countertop people or flooring installation company. I would also offer signs in my yard or maybe logos at the flip during showings

I hope hope hope that the work done has been acceptable quality. I’ve definitely been to “done” or 95% done flips that felt shoddy.

If all else fails, if you’re into it for $150-160 and it’s worth $230k, you should be able to find a flipper who will take it off your hands for cash for about what you’re into it for.

If you’re in the position where someone can get a mortgage on it, then I would try to list it on mls now before it’s finished and ask for someone to help me finish it while it’s under contract because payday would seem close at hand.

Check out Debbie Deberry and the FlipHers Facebook for free female specific advice. You may find a private lender

@Tracy Wang - I always first consider my LOCAL opportunities. Thinking this through - 1) you can buy and self manage a long term rental - ideally single family home with no HOA rules. 2) you can buy and manage an AIRBNB. 3) you can buy a too big house or 2-4 unit multifamily to "house hack" with roommates and tenants while getting a 3% interest 30 year fixed loan on it as your primary residence.

I always look locally first because there are many synergies with your lifestyle and local real estate. There are additional tax write offs. You also have almost 0 risk of near total loss like some have experienced investing sight unseen out of state. In my area in New Jersey, a $400,000 home has a $2200 mortgage with 75% down at 3.5% and generates $4000/mo from Airbnb equivalent type activities or corporate housing.

Alternatively, if you have cash you want to invest without putting it into the stock market, and want professional management and some cash payouts along with long term appreciation, consider investing in a passive real estate partnership / JV or syndication. These deals are currently advertising 6-10% cash dividends along with future appreciation with a goal of 14-18% ROI. In multifamily they are able to leverage 3-4% 70-75%+ loan to value large balance Fannie Mae or Freddie Mac agency loans. Now some syndications exist to make the syndicator money, and others exist as a long term cashflow investment for the owners. You vet the sponsors or partners in the deal and go forward only when you're comfortable. With accredited syndications, the legalese essentially says you agree that if you lose everything, you knew what you were doing when you reviewed the investment. So. Buyer beware. Good luck and let us know what you decide.