All Forum Posts by: Peter Mckernan

I would first look at not doing a flip at all until your cash reserves are saved up more. Flipping is not an easy and quick task that can be done with a little amount of money. There is a lot of calculations, market conditions, money, strategy, and more that go into each deal. I would save more prior to jumping in, even if it is a primary residence, this is because the rehab is always more than you calculated. 

You can use an FHA 203K loan and the conventional construction loan to do your rehab, these take longer than you expect as well. Sometimes these purchases, or refinances take 2 times the length you would think, and sometimes 3-4 times. I have a client that did a conventional construction refi and it took him 7-8 months due to the city permits and all. You really need to have your ducks in a row when you do this because you are not only answering to a contractor, your HML, or you bank account by pulling funds out. These loans are more time consuming, challenging on documentation, and other red tape than you can think of to be honest.

I am 100% in on advocating for doing more rehabs and leveraging Fannie and Freddie guidelines to do it, but you need a lot more stuff on these loans that will take you longer to do that is out of the ordinary for rehab/flip. 

I would start to look for another contractor in that area with references as soon as possible, this sounds like even with a clear define plan, the contractor will do more of the same. I would be sure to document the slow progress and continue to monitor for the next week, but if it is the same by the end of this week I would have 2-3 quotes from other contractors ready to finish the job. 

Biggest advice I would give would be to jump in with an open mind, and also I would look to join a team if I were you. I did not do this and looking back I would have done it to get more experience and gain the knowledge quicker. You can get leads, get training/mentorship, and fast forward a lot of success by joining a team on your first brokerage you join.  

I sent over a PM to you about this one Stephen. 

Great post!! This is huge, and the thing I would say if there are delays after well preparation or lack of communication, there should be a line in the sand when to pull the plug on a contractor and get someone else in the project to finish the job! 

All the stuff I do, and to add to it.. I bring a list of the offers (if you have multiple offers), this gives you the base to tell the appraiser if it does not sell to this buyer other people think/want the house at this price too.

Also, bring permits for anything that has been done. For example, just sold a house with a half bath added 5 years ago and no other models had it.. I added the permits to support the appraisers/list/contract price. 

Check the above toolbar, 4 in it shows property managers, this will get you a few and you can request their information. 

Just like Bruce said, not sure about MA.. Where I sell real estate we have to disclose it on the MLS, and I put it in the contract or an addendum for the buyer/seller to sign. This shows that they knowingly signed the document stating you are licensed and acting as the principal for example.

This is one of the most valid points, if you do not like spending money on professional fees just go find another deal! That is easy enough. 

The other thing about this thread is that I am just confused when there are complaints about the professional fees, but when it comes to wholesalers getting $10K, $50K, or even six figures on a deal to wholesale to a buyer it is just the cost of doing business. Not to mention a lot of the deals that are not even deals to begin while the fee is the amount above for something that is 500k-700k. 
 

It is all perceived value at the end of the day, just need to find the value that you believe is true to you and your needs.

There are a lot of cut rate brokerages out there.. If you are looking for a break in commission hire one of them that are not full service, or hire someone that is desperately in need of the commission at a hugely reduced rate in your market. There are people out there that will list for 10k, 5k, or whatever the fee is that you can negotiate. Those people are out there and I would search for one of them if the value to commission is in question which it is here in your question. 

I would say this, do you hire the cheapest contractor when you are doing a house because the pricey guys are charging too much? Do you hire the cheapest attorney because you are trying to save the most to hope that that attorney pulls through? The list goes on, and the old adage, "you get what you pay for," comes to mind.