All Forum Posts by: Rob Thompson

Hi Roger, I'm new to the BP forums as well but have been investing for 11 years and have a corporate background in non-profit and community development corporations (CDCs), so I thought I'd take a shot at your question.

I would encourage you do everything you can to get your credit score up while stockpiling cash (unless you need to use that cash to pay off old debts). Doing all you can might include listening to podcasts/reading articles but also exploring first-time homebuyer programs in your area. Even if you don't go through them to buy your first house, these organizations often have programs that help borrowers get their credit score up, so you might learn something new.

At the same time, see if any of your local CDCs have specialized lending programs. For example, here in Memphis, a CDC I know will periodically receive a loan from a large community bank, which the CDC turns around and loans out to homebuyers with poor credit. The bank does this because they receive badly needed Community Redevelopment Act (CRA) credit from the federal government while keeping those riskier loans off their balance sheet. This kind of arrangement is pretty innovative, so there's no guarantee that you will find something similar in your area, but you never know. Banks are always finding innovative ways to keep their balance sheet as risk-free as possible while appeasing the Feds for CRA. (A quick Google search turned up names like Lighthouse CDC, ONE Neighborhood, and Smithhill CDC in Providence, RI.)

Lastly, be patient. The real estate market, like all markets, is cyclical. We are on a long hot streak right now (the longest chronological bull market in American history according to a recent BP podcast), and there will be a cold streak that follows. It might be this year, it might be in three years, but it's coming. That's the best possible time to have cash, because it will be a buyer's market again. I'm not saying not to buy now - a good deal is always a good deal - but be patient, knowing that you're young, have a ton to learn, and (Lord willing) a long time to achieve all the goals you have and haven't yet dreamed up! Good luck to you!

Investment Info:

Single-family residence fix & flip investment in Memphis.

Purchase price: $50,000
Cash invested: $190,000

I bought this 2,000 SF house, built in 1929, as a rental property a few years back. It had been converted to a crummy triplex at some point in the 1960s, with separate electrical and gas. After holding as a rental for a couple years, I decided to convert it back to single family, either to sell or keep as a short-term rental. Peeling back layers of the onion as we started renovation revealed quite a bit of structural problems, and it ended up being the most intensive remodel I've ever done.

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

I love fixing up ugly old houses and making them beautiful and something a family would love to live in. Sometimes, this makes me a glutton for punishment (like this deal), but it almost always ends up with a beautiful house at the end!

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

A realtor brought this to me as a rental triplex.

How did you finance this deal?

Originally I paid for it with bank financing as a rental property (on a 5/15). When we decided to renovate and convert it back to single family, I took out a construction loan and paid off the original loan.

How did you add value to the deal?

This is a total gut job, down to the studs, which allowed us to make the badly needed layout changes to convert this back to a single-family house, but updated for a 21st century family. We added beams to create an open floorplan living room and kitchen space, a master suite and added two bedrooms and a large utility room upstairs.

What was the outcome?

To be determined! We are still in the midst of renovation but trades start next week and budget looks good.

Investment Info:

Single-family residence fix & flip investment in Memphis.

Purchase price: $50,000
Cash invested: $190,000

I bought this 2,000 SF house, built in 1929, as a rental property a few years back. It had been converted to a crummy triplex at some point in the 1960s, with separate electrical and gas. After holding as a rental for a couple years, I began the process of converting it back to single family in the fall of 2018, either to sell or keep as a short-term rental.

Peeling back layers of the onion as we started renovation revealed quite a bit of structural problems, and it ended up being the most intensive remodel I've ever done. As of the time of this post (January 2019), all structural work is complete, a new roof is on, exterior siding (1920s beveled cypress) repair is nearly complete and trades are set to begin next week. Once complete, this house should be worth $330,000, so barring any unforeseen budget overruns, we should still come out in the black on this massive renovation project. Best of all, we will have taken the worst house on the street and converted it to one of the nicest.

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

I love fixing up ugly old houses and making them beautiful and something a family would love to live in. Sometimes, this makes me a glutton for punishment (like this deal), but it almost always ends up with a beautiful house at the end!

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

A realtor brought this to me as a rental triplex.

How did you finance this deal?

Originally I paid for it with bank financing as a rental property (on a 5/15). When we decided to renovate and convert it back to single family, I took out a construction loan and paid off the original loan.

How did you add value to the deal?

This is a total gut job, down to the studs, which allowed us to make the badly needed layout changes to convert this back to a single-family house, but updated for a 21st century family. We added beams to create an open floorplan living room and kitchen space, a master suite and added two bedrooms and a large utility room upstairs.

What was the outcome?

To be determined! We are still in the midst of renovation but trades start next week and budget looks good.

Red Door Memphis is seeking a smart, hungry, and humble leader to serve as General Manager and lead day-to-day operations of our growing rental real estate portfolio.

• Are you a driven, decisive, and organized strategic problem solver?
• Are you great at translating big-picture goals into action steps?

• Do you love building and implementing systems and processes to drive operational efficiency?

• Do you see adversity and setbacks as a normal part of any job and want an environment where you can handle them with poise, decisiveness and free of politics?
• Do you want to work in an entrepreneurial environment where your work will make a real impact?

If so, as the General Manager, you will be the driving operational leader of a 13 member team managing a 100+ unit (and growing) portfolio of residential and commercial rental properties in Memphis. Under your leadership, the company’s operations will be strengthened and standardized to improve profitability, operational efficiency, and construction timelines, all to prepare for additional growth.

Specifically, you will:

• Hold property management and construction/maintenance teams accountable to performance standards
• Select subcontractors and manage 5-10 renovation projects at a time, ensuring that both affordable and market housing renovations are completed to our different rental and resale standards, including visiting job sites weekly.
• Design, build and implement processes and procedures to increase operational infrastructure and hold internal and external team members accountable
• Make day-to-day decisions regarding repairs, renovations, collections, and leasing
• Build, analyze and ensure performance against renovation budgets
• Build good working rapport with tradesmen while simultaneously holding them accountable to standards and timelines
• Coordinate the integrating and onboarding of new properties
• Build our acquisition and renovation processes into a “machine” that is quickly and efficiently deployed on all new properties, getting even the toughest properties renovated quickly and handed over to the leasing team
• Monitor portfolio cash flow weekly and seek to maximize property profitability
• Manage the entire enterprise with metrics and a scorecard that ensures excellence, accountability, and confidence in performance

Skills needed:

• True humility, seeking to grow and support the people you work with
• Independent thinking
• Analytical and financial abilities
• Self-starter
• Attention to detail
• Diplomatic yet direct communication
• Tech savvy (comfortable with spreadsheets, etc.)
• Accessible and approachable
• Construction experience a must, project management experience a plus
• A strong history in developing and using outcome based performance and metrics
• A change leader; hands-on; “roll up the sleeves”, positive “can do” attitude, with a high energy level

More about the position:

• Red Door Memphis is family-owned and faith-driven company seeking to grow the organization and portfolio in accordance with its culture and standards and is looking for the right leader to help get us there.
• Reports to the Owner, who is eager to coach, lead and teach the right leader towards business success and personal growth, but not willing to micromanage.
• Supervises a team of primarily remote office professionals, including manager to Property Manager and Construction Coordinator, and multiple local Maintenance Technicians
• Depending on the skills and experiences of the individual hired, we anticipate a competitive base salary, performance-based bonus opportunity, medical benefits, and relocation assistance (if ultimately necessary, as local candidates are strongly preferred).

This is a position for a driven and strategic operator who will thrive on:

• Envisioning and implementing standardization and getting results
• Leveraging their “ownership mentality” and not be micromanaged
• Being responsible for outcomes as well as a lot of variety and moving parts
• Balancing a large number of renovation projects while also leading a team of remote office professionals towards constant growth
• Bringing structure and systems to an industry known for missing deadlines and going over budget while remaining flexible and keeping your cool

This is a fast-paced, hands-on leadership role with a lot of variety. If this sounds like you and you are qualified and interested in being considered as a candidate for this great opportunity, please submit the following information:

• Resume (in WORD format)
• Most recent compensation information

Please send the requested information to [email protected]. In the subject line, please indicate General Manager application.