All Forum Posts by: Nathan Platter

DM'ing you a name of a gal who owned almost exclusively Section 8 properties and did quite well.

Fantastic play, Jordan! Keep it rolling!

@Jay Hinrichs I like the idea of doing some investigative work on the fellow, similar to a tenant.

@Caleb Heimsoth  Good point, that validation indeed ought to go both ways.

@Alexander Felice Right on!

@Tim Swierczek Yes, I'm working with a lender that knows we will be flipping the TBD property within 6 months. I don't know the name of the loan product, but he's with a local bank here in the Twin Cities. Ouch! Sounds like that borrower wasn't upfront, I'm definitely looking to build bridges rather than burn them.

@John Woodrich His parents have done flips and he's done hands-on work (he's 25-ish) and he'll be the buying agent, GC, and selling agent, in addition to bringing 50% of the cash funds (I'll be bringing the other 50%) Yeah, that Check part seems odd so I'm balking at that for now, as at this point we're not writing enough offers to justify sending EM.

The Arrangement

*Jack* and I met a few weeks ago, have a lot in common, and want to flip a house and share the profits 50/50. Once we find a deal, Jack will coordinate the rehab and I'll continue working my corporate day job.

• Jack is a self-employed, Keller Williams KW agent. He's done 0 transactions in the past 24 months (owns a storage unit in rural MN Minnesota, his wife is the breadwinner) 
• I'm an investor with funds available for a deal. Worked for a house-flipping company in the past but this will be my first personal flip.

Bank Approval

Me: Pre-approved for $250,000 all in (acquisition + rehab)

Jack: working with the same lender but hasn't received his numbers yet.

The Deal (we found one!)

Acquisition price: $240,000

Rehab budget: $45,000

ARV: $400,000

The Scenario

So far so good, right? Here's where it gets odd.

1. Jack wants me to be the sole borrower on the property, on our joint project.
2. Jack wants me to not tell the bank about my source of rehab funds because it'll "complicate things with the bank"
   1. The bank has capped my borrowing limit at $250,000, which is above the necessary $295,000 to do the deal.
   2. As a workaround, Jack will be the sole provider of rehab funds (personal funds, cash)
3. Jack wants me to give him one of my personal checks so he can write future offers.

Is this a strategic way to expedite the rehab-lending process? My gut instinct says Jack's being shady.

What are your thoughts?

Hey @Channing Chanel ,

The best part about getting a commercial loan is the banks will tell you exactly what they need you to do, and in the right order.

Touch base with a Commercial lender who underwrites multifamily properties and they will tell you the right next steps. LLC formation, submitting proofs of funds, getting letters of intent, walking properties, talking to general contractors,...

Hey @Patrick Olownia ,

My favorite part about house hacking is living in nicer neighborhoods. We house hacked our first property and got to live in an A+ neighborhood but our out-of-pocket cost was at a B-C level price. Having someone else helps cover the PITI adds up.

Hey Ed,

Check out  ThumbTack's website. It's like a reverse Yellow Pages; you post the jobs you want (interior paint, bathroom remodel,...) 

It's free for the user (you) but the contractor's pay to get leads (your jobs) 

Hey @Jacob Riccio ,

You'll want to leave yourself at least 15% net profit margin so you can get paid and cover any unforeseen issues. Since this sounds like a complete gut rehab, you likely won't have too many of those.

Additionally, leave room for acquisition costs, holding costs, and selling costs. 

A rehab budget is usually 25-35% of the ARV, so $150k in repairs sounds quite steep.

Either:

• find a GC who can provide even more accurate (in this case, much lower) rehab estimates or 
• see if this could be a higher-end flip (target ARV closer to $400k)

Pro flippers pass on 95-98% of all deals, so don't get attached to this property. It's (burnt) bricks and sticks with dirt beneath, it's completely OK walking away if the deal is a financial stretch.

@Jay Helms may have some great input as he's done a BRRR with an apartment building as well.

To my knowledge, you can BRRRR the same way in commercial as you can in residential, simply because it's

1. Buy distressed
2. Rehab
3. Refinance
4. Repeat

Hey @Nikayla Snyder ,

Welcome to the BP forums! There are a ton of helpful articles and fellow investors on here, so it's worth exploring as much as possible.

Photography I'm going to disagree with @Account Closed on this one. Construction companies (or any company) often try to pidgeon-hole employees so they have stable expenses (salaries + benefits) while pursuing more sales. A salaried photographer in the Twin Cities makes $40k/year but you could make 2-3x if you go solo and add drone and Matterport to your offerings. That's all assuming you never hire out any of the work and do 1-2 photo shoots a day.

First acquisition idea: One option you may consider is buying a 2-4plex, live in one unit, and rent out the others. It'll give you a chance to learn to find deals (with or without a realtor), analyzing the deal, making offers, conducting due diligence, finding/keeping renters, and property management.

Taking action: At the end of the day, the successful investors take action. Most investors get stuck after analyzing and before 'doing' so make sure to 'do' when the next light is green. It's even better when your spouse is on board!

You'll do great!