All Forum Posts by: David Friedman

Unless you already had a decent job for 2 years (Minimum) while in college, lenders will typically give you financing based on you graduating with your bachelor's degree and securing a contract with a job in your degree's related field.

If you can only afford a single family house, buy it within a mile of a large college and rent out the rooms to students with jobs. This is how I cash flowed my first real estate purchase. You'll always have renters in this situation.

If you have the resources, go for a 4plex. You costs are aggregated between several units and thus over the long term, are more likely to save money when you need to replace one roof instead of four.

The question you are asking is known as the "Highest and Best Use" in the commercial real estate industry.

@Karen Margrave has a ton of experience in new development. I would reach out to her or look at her previous posts to begin your research.

In general, you should understand what zoning allows and go from there. Demand would be your next step.

I have a friend who owns a shopping center in Yucaipa, CA. He handed out questionnaires at all of the big box grocery stores in the city to find out what the city is missing and what there is demand for. Apparently, everyone wanted a Dairy Queen. He now owns and has become very successful by operating the Dairy Queen. Do your research because once it's built, it's very hard to change direction.

They could most likely take the drapes with them. It would be in bad taste to do so, but they can do it. They wouldn't be able to take the rod holding them up though without replacing them with a rod satisfactory to your friend buying the house. If the Murphy bed is removed, the wall would need to be left in good condition (Holes patched and painted) If the sellers can't do that, then they have no business removing it. Usually these items are negotiated in the purchase agreement, but the Murphy bed situation isn't so cut and dry.

Depends on how much risk you want to take on. It's a safe and smart bet to get rid of your student debt. 6.5% beats the S&P 500 average and so it certainly wouldn't be foolish to pay that off. Then again, you are young and taking larger risks now should pay off for you in the future. If you can make 10% net by buying a rental property I'd say you should buy a rental property. Keep in mind you'll need to make sure your calculations are correct on how you get that 10% net number.

For reference, I am 23 and I have over $6,000,000 in real estate debt that I am servicing. I am fortunate enough to have graduated without college debt (Paid it off by working through college). 

Hello Alfredo, the 90 day flip rule has its pros and cons.

Some clarifications first. The 90 day flip rule does not apply to conventional financing. You will have to get two appraisals and justify the price to the lender though. Many buyers only qualify for FHA though as conventional requires a higher credit score, down payment, etc.

When I started flipping 2 years before the 90 day flip rule we could rehab a property in a month and have it sold by month two. We were making 60 to 100% return on our capital in those years. The downside was that I was competing against huge corporations for these returns. After the 90 day flip rule came into effect, I now compete with the average local investor for the most part.

One large downside is that if we finish rehabbing a property in a month, is that the property is now vacant for the next two months unless I can find a conventional buyer. This causes break-ins, holding costs and more risk for a market shift.

Overall, I haven't let this rule slow me down. We are flipping 35 properties at one time right now. It does take an average of 4-5 months now to flip one property though. I may start flipping commercial property instead!!!

@Lisette S.

Depends on the situation, but in this case I used my own personal capital for 25% and hard money for the rest. I can spread my capital much further this way.

@Robert Cornell

Just wait until you've closed a couple of deals! Then you'll really be obsessed. I do consult with investors from time to time. I'll private message you.

Best Regards,

David Friedman

Lol @Aaron Mazzrillo

I love this game. You know you're a slumlord when..

@Robert Cornell

A lot of networking. Exactly what you're doing on bigger pockets. Keep in mind, the most valuable guy is the guy with the deal. There's plenty of people with money out there.

Hello BP!

I'm continuing the postings of all my previous flips. Throughout 2016, my company has grown and improved tremendously. From our contractors, project managers, to the office manager, we all developed as a team. We hope to reap even more rewards in 2017 than we did in 2016. Hopefully, some of you can learn from our mistakes and successes to help further your real estate journey.

Link to my previous post: Flipping Homes - My Exciting Journey (Post 2 of ?)

Property: Yee St, Moreno Valley, CA

Purchase Price: $165,000

Rehab Cost: $29,000

Escrow and Holding Fees: $11,600

Sold: $249,000

Net Profit: $43,400 or 22% ROI

What I Learned: Even if a property seems like it can't be fixed.. with the right contractors you can fix any house. Make sure you build the right team to conquer any size project. Also, understand what each person on your team is capable of doing. This house, at first, seemed like a long and time consuming project we were able to fix it up and put it back on the market in a matter of a couple months. 

After Pictures:

Summary: 

Even though the house seemed in bad condition, it was a very smooth rehab. Everything that went right, went right. My advice to any other potential flippers would be, no matter how hard a project is or may seem, keep your sight on the bigger picture. Persistence is key in this business, whether it be pushing your contractors to get a project done or pushing for a lower price.

Since we have over 30 ongoing projects right now, I plan to post one of these every week. Please let me know what you think about our flips or if I could improve on anything.