All Forum Posts by: Patrick Britton

@Joseph Bass no offense, but could have meant they don't like people who are cheap?  $100 above asking might have offended the seller...hindsight is 20/20 but maybe you should have a few % points above asking?  

Don't forget, sellers do not sell a home the way a buyer purchases one.  Sellers are often emotional wrecks barely hanging on to reality (often when their agents are "less than amazing").  They don't see things objectively.  Buyers, especially investors, are unemotional Vulcans by comparison.  The two aren't always compatible.  Don't worry, there will be other houses. 

If you were not working with an agent, that could have done a lot of damage to your offer, at least as far as the seller is concerned.  Without representation and coming from a legitimate realtor, your offer could have seemed "greasy" or "shady."  I know, I know...your offer was beautiful (to you).  But to a weirdo seller wearing a tin-foil hat, you are whatever they convince themselves.  

This will be the last meeting hosted by me, Patrick Britton.  I am moving to Ann Arbor, MI in early July so be sure to come and say goodbye. 

https://www.meetup.com/Bellingham-Real-Estate-Investors-Meetup/

Future meetings shall be hosted by Lisa Kennedy of Neighborhood Mortgage.

@Michael Noto yes, it could not have been done without @Mark Ainley

@Jeremy Wickens  before getting started on paper i was supposed to MAKE $13,000 doing this, but stuff happens.

@Brett Tvenge i used Renovo Capital and the property is in southside Chicago. Renovo was pretty standard rates and whatnot, but keep in mind the total loan was below their minimum so the "cost" on a percentage basis was high. I think it was about $8,500 in total upfront costs, points, fees, etc., and then 10% interest only. But they were a breeze to deal with and getting reimbursed was quite easy and fast. Often service means a lot more than price and when it comes to getting reimbursed from a HML I prefer speed and ease to cost.

@Luis Medina I used Lima One Capital. 75% loan to value. 10 year arm at 6.9% or so. yes, LLC.

Big changes coming to the networking group.  

https://www.meetup.com/Bellingham-Real-Estate-Investors-Meetup/events/ktjdwqyzjblb/

@Ryan Conklin we the down payment was 15% of purchase and reno, which totaled $14,000, then there are closing costs which were another 3k, then hard money lender funds made up the rest. HML is expensive...

@Luis Medina i didnt have to wait any amount of time.  I refinanced into commercial loan.  

Here are the results from my first out-of-state BRRR

• purchased property for $62,000 
• budgeted $30,000 (expecting it was going to be closer to $35,000)
• ended up putting about $41,000 into the property
• the cash to close and buy the place was $25,000 with Renovo Capital (excellent experience with them, i highly recommend)

My property manager (@Mark Ainley) acted as project manager for a set fee, which I thought was very fair.  He doesn't have plans to repeat this service which is unfortunate but understandable.  

The appraisal came back at $144,000, which is low because one of the bedrooms didnt get a closet for some reason. The missing bedroom cost me $10,000 in value :(  My property manager found a market tenant in under a week, presumably due to the rent being low for 5 bedrooms in the area, but right in line with 4 bedrooms ($1,650/month).  There were 5 applicants in the first week.  

I received back $24,600 from the refinance, so technically i've got about $400 of my own money still in the property.  It took a little less time to renovate the property than it did to refinance.  But, in the end I've got a fully renovated 5 bedroom bungalow rented for $1,650/month in an economic opportunity zone for an out of pocket net cost of $400, so it's a victory i guess.  

LESSONS:  

-confirm and re-confirm the bedroom count.  In my area of operation, each bedroom is $10,000 in appraised value which translates into $7,500 back back with the refinance.  Thanks to a miscommunication with the first appraiser & my project manager only 4 bedrooms got counted (vs. 5).

-listen to the property manager's recommendations regarding items tenants value.  In this case, the PM said that security and safety are much more valuable than, for instance, quartz countertops.  So this means heavy-*** security doors, fences, locks/deadbolts, and exterior lighting.  Fine by me!  

-you might have everything perfectly organized but it's impossible to account for errors made by other people, no matter how careful you are, no matter how much time you spend following up, and no matter if you're correct. In the end, there's a lot that's out of your control, so best to add a large layer of variability to any subjective number, such as ARV, rent, and repairs. It's also best to double whatever timeframe "should" occur so you're not irritated when things don't proceed as they should. Being diligent and well-planned will only go so far. I believe it was Gen. Patton who said "no battle plan survives contact with the enemy."

One last tidbit...although I had a verbal offer to buy it for $175,000, I'm not looking to sell (especially since it's in an economic opportunity zone.)  I figure i'll hang onto the place for 10 - 15 years and see what values have done by that time.  Still, it's nice to know there was a potential buyer at that price out there so quickly. 

I have been seriously considering a 100% electric vehicle since I fail each month to keep gas bill under $300.   Between the actual car payment and gas, it's costing me over $600 - $700 a month, and i drive a very modest Ford Escape.  It sucks but fortunately as a realtor i get to deduct a large portion of the expenses.  Still it's money that would be better allocated towards principle on one of my rentals.  

@Jason Lam since that question is very difficult to answer, i would say simply gravitate towards people from Bigger Pockets with lots of posts, votes, and an otherwise seemingly respectably reputation.  You'll still have to go through a lot of garbage, and there might not be anyone in whatever city you're buying and it's a lot of work, but it needs to be done.  

just find someone who has done what you'd like to do and offer that person something they are lacking, whatever that might be.  For instance, offer financing to that investor so they dont have to use their own funds.  but of course i can't tell you want to offer since i don't know what you can offer...