All Forum Posts by: Peter Mckernan

I agree with Joe, the deals that you could have had would have been 25%, 40%, 60% and more depending on how you look at it. Instead of looking at it all or nothing, look at it as a part of business to get bigger and grow with a partner. 

This is a great idea and I would really get with the realtor who helped you buy the property to pull comps to see who is selling properties like this in the area for on a sales price with the ADU attached and detached. There is a lot of data out there that you can get, the best is from the MLS and your real estate professional that can tell you how much your house will be worth after it is done.

My suggestions would be doing a fully detached ADU on a side of the lot where the people staying in it can exit without disrupting the front house/main house. This will give you a better value when going to refinancing it when that time comes or selling it.

Other action items are getting quotes from architects, engineers, and GCs to see if you are able to financially do this type of build out.  

I would reach out to some local realtors and property managers along with GCs to see if they have someone they recommend. Or even local flippers in the area to see what you could uncover on this route of finding a PM. 

The older the house, the worse this will be.. I just did a rental that had to be basically redone top to bottom, and we had to do everything from remove a sub panel that we did not think we had to do to re-pipe a lot of the house due to the old piping and moving the kitchen around. 

An older house does not mean that it is the worst thing to buy, it just means there might be a lot more needed to get to a solid ARV. Just make sure that you get full details on it all for the subs and contractors before your contingencies are up. Get the GC and the subs to crawl all over the house, condo, or townhome.

Sometimes it is a percentage for us and sometimes it is a dollar amount. If we are $500,000-$750,000 we are needing about a $40-$50K on the deal, and of course the higher the deal gets the bigger the profit.  

If you are brand new and just trying to get deals, the deals you want to be doing are any and all deals that make sense. So, if you are doing deals and need to give equity and interest rate that is high you should do that as long as the deal makes sense! 

When you start to do more deals and get better at what you are doing I would only be doing an interest rate that is solid and points that make the deal good for you. When you are doing a lot of deals and are seasoned it is hard to give away equity if the deals/flipping is your full time business. 

The biggest challenges on scaling flipping are quality control with contractors for example getting the vanity light straight and centered with the vanity sink. The change orders or surprises while flipping and of course timelines that expand. 

Wholesaling is something that you need to be in alignment with when doing the work. You need to make sure that the deals are solid for the people that are buying them, and you need to realize what some people call a deal is not a deal to some and a deal to others. You need to be transparent and honest, and sounds like you were/are doing that which is great you did the move. I had an issue with this earlier in my career when I was getting some wholesale deals from off market sellers, and I realized if I was honest about what their house was worth to them and then to the person buying it then I was doing my job. 

This is something that a lot of wholesalers get wrong, and then get a bad reputation. You need to make sure the deal is actually a good deal or the numbers/terms are explained to both sides to make sure everything is within alignment. 

Thanks for the post!! 

The protocol for our company is 500.00 but we give every own the option. Some have home warranties they want us to use every time, or they want to be hit up when the fix is $200.00. We change what is needed if it is needed when they sign the contract. 

I would read the contract, and for the tenant losing their job and needing to bounce. There are times where they can cover the rent till the new tenant is found, and possible security deposit is released to the owner too for breaking the lease early. To be honest, the contract and state/local laws will outline this for you in detail. And once you agree to what is going to happen get it in writing.