All Forum Posts by: Peter Mckernan

Correct, just had this happen the other day to a client, the owner was the estate, and the estate went to NOD then sale. The amount was above and beyond the note on the home, so the estate got the difference between the sales price and loan.

It really depends on the area, that margin seems low as some people said.. 85%. I know if you are flipping in my area and there is a deal brought to me and there is a spread between ARV and PP of 150K I will look at it. That is with no other additional fees, wholesale fees etc. At that price, I will look at the deal deeper, and that is for an entry-level home in my market. You should have something built in that is a solid number for the type of home in that market and what you could buy/sell for within reason.

I think this does take some time to zero in on this as you get better and better, but to be honest you still have to do your deep dive on it. 

Always run the numbers and get the data from the MLS, not zillow or redfin. The deep dive on getting the true data on ARV is the best and most misunderstood thing by buyers. If the right comps are dug up then it gives that buyer the true answer if it is a deal or not a deal. This goes for any market, so many times the comps are not true comps and the person who bought the deal is out in the market losing money and the person who sold them the deal is out selling another deal with no care. You really need to know what is selling in that market and research the right properties to get that ARV nailed down.

I would go off what you know for example, the place that I invest a lot in is the market I grew up in (I do not live there anymore). I know the market, a property comes up, I know it is a deal and not a deal. If you do not want to do this, then I would say pick an area that you travel a lot to (i.e. have friends in areas, or family in areas you want to invest in). Narrow in on 5 areas that do deep dive on and then from the 5 go to 2 areas, and then you can settle on the best one. 

The most I would pay 30% upfront, and that is typically still high. Usually I do 10% on contract signing then 30% the first week when the project is underway with a contract I use a lot. If it is someone new that I have not used, 10% and then weekly check ins on the site. 

 @Joe Homs has a good thing going for lower pricing on stuff through his brokerage

I would have an A&B company setup. One for all the time and the other company/contractor for when you get slammed you can put them in. Kind of like basketball, if there is too much work for someone for too long you can sub someone in! 

 Then I would look at local meetups and who runs them and message them directly to see about networking with people in your market.. The people that run those meetups probably have solid contacts for that

Buying right is always subjective, as someone that has seen some people buy bad deals from others. The buying right comes down to knowing the calculation in comps/rehab. There are a lot of people out there that give comps to a buyer just to sell the deal they have right now, those people selling do not realize this a relationship business.. The point is, the person selling you/the investor a deal might be someone giving bad comps to the buyer which turns out to be a bad ARV and they are buying the deal for the wrong price. Working with someone that knows the ins-outs of the market is what you need to do when doing flips, what are the comps, what is going on with that HOA that could cause to decrease the sales price, what the actual model match or close to it sold for... And the list goes on for buying right.

I would search up at the top of BP for people talking about South NH in the search bar, and the next move I would make is going to as many investor meetups in that area as possible! That is something you really want to do is go to those and network with people that are truly doing the work that you are doing that you can partner with for project management help, money help, and next finding deals!