All Forum Posts by: Mitch Ferraro

@Brett Kash Love this question. Sounds like you are on the right path. We use standard templates for everything and fill in or take out for what’s needed for each project. We have our standard contract, SOW, payment schedule, materials list, partial/final liens waivers, indemnification forms, etc. all pre-populated through Google Drive for every new project. And also use docusign for electronic signatures. 

We also use GCs for all of our projects, even smaller ones. and really have them take care of paperwork. There’s definitely still some “babysitting” at times for them to get things to us like change orders but for the most part they take care of it. One thing we will absolutely get from them, which I’m sure you are aware of, is signed final lien waivers from all their subs. This just helps make sure they are paying subs when you pay the GC. Helps eliminate a sub, down the line, that may try and put a lien on the home because they weren’t paid by the GC. 

Thanks @Brett Kash! Yes, this was a great one for us. Not only the paycheck but also learning how to shore up our systems and process so we could better execute in the future. Are you currently investing in the Milwaukee area? 

Hey @Anthony Del Russo!

Let me start out...I am not an attorney, I'm just giving my advice and opinion. :) 

Is it possible that your agent can have someone in his/her brokerage take a look at this AOS? Maybe even the broker him/herself? What is the normal agreement in PA? If it's a different contract is possible to have the AOS written up in PAs standard form? I'd say exhaust all options before having an attorney review but if you can't get what you need and don't fully understand the contract I'd have an attorney review before getting into it. You don't want your first deal to leave a bad taste in your mouth. I understand your tight with cash but what happens if you get into the deal and it costs more than having an attorney review?

Here's what we account for in every rental: 

Mortgage (which you may not have if purchased with cash)

Property Taxes

Insurance

Vacancies (1 month's rent for the year)

Repairs (1 month's rent for the year. This will be lower than some but almost all of our rentals are rehabbed properties)

Property Management (1 month's rent for the year)

Water, Sewer, Garbage (if a multi-unit)

After all of these are paid out we like to be cash flowing $200 - $400/month. @Account Closed there are also other ways to finance. You may want to try and find one of those properties that needs work and fix it up yourself, espeically if you are a handy person. If you can get a private lender to give you the funds to purchase & rehab the property you could then refinance the property (with a more traditional lender) which would pay back the private lender and if you bought the property correctly you could be going to the bank with very little to no money down at closing. This would be because you built all the equity into the property. 

This is what's considered the BRRR (Buy, Renovate, Rent, Refinance) strategy and allows you to pick up rentals with very little money out of pocket. I hope that was useful. Let me know if you have any questions. :)

Hi @Crystal Hogsed 

I agree with @Dion McNeeley! I do think you need to first figure out your "why". Why are you getting into real estate? Why are you doing this? What's your big goals and dreams? Once you put these together you can start executing strategies when you get there. 

When my wife and I started out we made sure we had a very clear vision and goal of what we wanted our REI business to look like and we worked backwards from there. We decided that renovating homes (flipping) was going to be the quickest way for me to get out of my full time, corporate job. So, we began our education and then began executing what we learned.

This is the most important thing, in my opinion, when starting out. If you are going to learn how to do all of this REI "stuff" you have to go out and execute it. And trust me, it will be scary and you will hit a lot of bumps in the road but you have to keep moving forward and not give up.

This is why your "why" is so important. If you don't have a strong enough why it will be tough for you to get through the days, weeks, months, maybe even years of hard work to not give up in this business. Make sure your reason "why" can push and pull you through those tough times. When we began we made sure we wrote down our reason "why" and made it very visible to us every day and still do that to this day. I've now been investing in real estate full time for the past 4 years, own multiple REI businesses (wholesaling, flipping, buy & holds, and coaching), and I'm also a licensed agent in Wisconsin (mainly for MLS access).

Hope that was helpful and useful. :) Good luck to you and your husband. I'm positive you guys can crush this! 

Investment Info:

Single-family residence fix & flip investment.

Purchase price: $139,500
Cash invested: $90,000
Sale price: $305,000

This renovation was located in Pewaukee right across the street from Pewaukee lake.

What made you interested in investing in this type of deal?

This was a great deal and was located in a prime spot in Pewaukee. The numbers were stellar and we knew we could turn this eyesore into one of the best properties on the block!

How did you find this deal and how did you negotiate it?

We were able to obtain this property through a local wholesaler. The wholesaler worked directly with the seller and negotiated the price.

How did you finance this deal?

We used one of our private lenders for this deal.

How did you add value to the deal?

This was a complete remodel with basically new everything. From the exterior to the interior to the mechanicals we updated this home to bring tremendous value not only to the property but to the area, as well.

What was the outcome?

Awesome renovation and resale. Great profit!

Lessons learned? Challenges?

This was a major renovation. We were challenged with unexpected roadblocks along with rigid and strict inspectors. We also had a problematic GC in which we had to hire a new GC to cleanup other's mistakes at additional cost. All was saved though by our process/contracts and estimating a safety net prior to getting into this deal. We still walked away with a great profit. Because of our systems we were able to take what could have been a huge loss into a winning and very profitable scenario.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

Yes. We used Summit LDS in Milwaukee for our title company which we highly recommend to any investor in the Milwaukee area.