All Forum Posts by: Account Closed

@Joseph King  I suggest you start going to local meetups / networking opportunities and KREIA meetings.  Some of the questions you would ask about Section 8 could easily be answered by the people with the appropriate experience.

There is a meeting being held by @Brett K. this Thursday....

https://www.biggerpockets.com/forums/521/topics/29...

I'm holding a networking meeting this Saturday...

https://www.biggerpockets.com/forums/521/topics/28...

Next Tuesday, April 5th, KREIA is holding a get-together

http://kreia.com/Events.aspx?ID=L-O-T-S-Learn-On-T...

The following Wednesday, April 13, is the Southern Indiana sub-chapter of KREIA meeting.   I know there are a couple or a few Section 8 landlords that come religiously...

http://kreia.com/Events.aspx?ID=Indiana-Sub-Group-...

If you know of anymore, please let me know.  I'm always wanting to talk shop with people in the business that are motivated to do the business and move forward, in whatever capacity they choose to invest.  The more we help each other, the better it is for all of us.

Keep rockin'.

@Reece O. This particular one is during the week, but I've got one this weekend right across the river.  

https://www.biggerpockets.com/forums/521/topics/285232-louisville-southern-indiana-real-estate-meetup---accountability

There are a number of ways to do this.

• You can create a business plan, for sure.  I would go through that exercise if I were you, in order to simply learn what you currently don't know.  Head to sba.gov to look at drafting a business plan.  Go to bplans.com to help as well.
• You can create SMART goals centered around the large goal.  You've already got one sub-goal (6.25 units/year).  Indeed, you can further break that goal down into one more discrete component.  That is, every 1 month and 28 days, you will have a house under contract, in escrow, that is moving towards closing.

Here's the thing;  I'm for both of these things, but certainly NOT just for the sake of doing them.  Do them, but do them as quickly as possible, for one reason only.  You are looking to generate as much clarity as possible to the action steps needed to move towards your successful outcome.

If the objective I've outlined above is enough for you (1 house under contract every 1 month and 28 days), your action plan becomes a little clearer.  That is, your next questions should be centered around how to achieve that first objective.

I would say getting out every night and looking at houses (yes; every day) should be your next step.  You should make a sub-goal of seeing 20 houses a week (approximately 3 per day or so) in order that you can put purchase offers on 7, in order that you can get one locked up.  

Believe me when I tell you, IF you take these steps, you WILL get at least one house locked up every couple of months.  IF you get one house locked up every couple of months, you WILL obtain your goal in twenty years.  

Indeed, because of what I know about the nature of goals, you will FAR exceed your original goal.  But, you don't have to worry about that at all for now.  All you have to worry about right now is going to see houses every night, for the purposes of putting houses under contract, for the purposes of getting your first deal.

Good luck (though luck has zero to do with it).

Keep rockin'.

@Jared Vidales
I am interested in any leads you have for the Southern Indiana / Louisville area.

Also, @Marina Sud is a very active wholesaler for the area.  If I am unable to buy, or the deal doesn't fit my criteria, she probably can find a buyer for you.

Regarding my criteria for deals (this was originally written for a couple of wholesalers in the area.  I didn't write it just now for this post.  But, it applies, so here goes):

I use similar square footage (within 10%, or as close as the comps allow), same BR, BA and garage. For comps, I will also use houses built around the same time-frame (before 1970, I consider all houses the same time-frame. After 1970, they must be within 10 years of each other). The comps must be SOLDS (not pendings) within last 180 days. The comps must be within 1/2 mile of subject property. If there are no solds within 1/2 mile, I will go out 1 mile, but it's a rare case.

I am looking for both rehabs and buy-and-holds. My criteria are different for both. I will outline the rehabs first.

For rehabs, I'm looking for 3 BR or more in Clark or Floyd County, IN. I don't want any houses with foundation issues. Any other issues are fine (mold, water, termites, roof replacement, HVAC replacement. Not much scares me). I am looking for houses that are for sale for between $5,000 and $85,000.

Here is the formula I use when I purchase, so whatever you make under that is gravy for you.

ARV (I don't average. I usually use the highest number of the comps if it makes sense; same neighborhood,etc.) minus

• 30% (for example, if ARV is 100K, I multiply this by .7 to come up with 70K. This is where I build my profit).
• Rehab cost (this is also pretty important for you to get accurately. I'm also going to end up doing an inspection before I put it under contract with you. This is the part that can really mess up the deal. Not sure what your process is for this, but I recommend contacting a contractor to get pricing (unless you're one). This should give you a relatively good estimate).
• Holding cost (for 6 months). (I base holding cost on PURCHASE price, which is only an estimate at this point. So, if my purchase price is 40K, I take 1.2% of that and multiply it by 6 months. This is my holding cost. In this instance, holding cost would be 480 per month * 6 months = 2880 (I'll round up to 3,000 to keep it easy).
• Closing costs and commissions on backside. Though I normally pay buyers closing cost when selling, I don't automatically factor for that (which is good for you). Here's how I do commissions and closing costs. I take the ARV and multiply it by .08. Whatever that number is, I subtract from the ARV price. (In this example, 100K - .08 = 8,000).

So, to recap (and to frame it in one formula), here it is.

Max bid = (ARV*.7) - rehab - (Monthly holding cost (purchase price * 1.2) * 6) - (ARV * .08).

So, walking through a house with an ARV of 100,000 (for ease), here is the house put through the formula to come up with MY max bid.

Max BID = (100,000*.7) - rehab - (purchase price (estimate at this point (let's say 40K) *.012)*6) - (100000*.08)

Max BID = 70000 - 20000 (made up number) - 3000 - 8000

Max BID = $39,000

$39000 is MY max bid. For you to make a profit, you need to lock it up under that amount. (I'm assuming you already know that, but just in case. I don't know how experienced you are or aren't).

Ok. My holding/rental criteria is slightly different. First, I'm ok with 2 BR or above. Class C or above. I'm also ok with multifamilies.

I have slightly less stringent criteria for these, because I'm not interested in purchasing a hold property up-front that requires rehab. However, I'm only interested in properties that I can purchase for 75% of ARV. Same comp criteria as above.

My other determining factor will be based on average market rent in the area (neighborhood). The GRM needs to be at least 10%. I actively look for wholesale properties to hold that I can get a GRM of 20-25%, so 10% isn't a great deal to me, but I will look at it.

That's it. 

Keep rockin'.

 Hello @Darcy Maiangowi.

Everyone gets their $1,000 back and what else?

What is the enticement for people to invest?  What is their return?

@Joseph King Have you checked this guide out?  

https://www.biggerpockets.com/renewsblog/2015/01/31/ultimate-beginners-guide-real-estate-wholesaling-2/

Also, I did also want to give you some feedback as well (since I'm constantly looking for wholesalers to bring me good deals in this area and you have potential to be a great one given enough time and diligence).  

If possible, when you bring deals to a buyer, look at it from their perspective.  What information could they possibly want from you?  Bring them a package that they can glance through and do all the necessary diligence within a few short minutes.  What shouldn't need to happen is the buyer having to go out of the package and online to verify or look up more information.

When you sent me the package the other day for the multi-family in Louisville, the comps were all over the place.  To be candid, after you sent them (after I prompted you to), and I saw they were so different, I didn't even continue forward.

Without showing addresses, here were the comps provided:

BR/BA Sq Ft Year Pricesold Datesold  

3/2 1620 1925 46,675 10/15/2015

3/2 1350 1925 60000 6/10/2015 

 2/2 1998 1923 95000 12/22/2015 

 3/2 1796 1920 59000 5/19/2015 

3/1 1788 1929 90000 6/8/2015 

3/1 1768 1915 48000 10/1/2015

So, a couple of things; 
1) the BR/BA range from 2/2 to 3/1 to 3/2.  No good.  Try to keep it the same or as close as possible (for example, if subject is a 3/1, try to keep to 3/1 or maybe a 3/2.

2) Square footage is all over the board here as well, from 1350 to 1998. That's a huge difference in terms of SFR and could make tens of thousands of dollars of difference in ARV.

3) Price sold ranges from $46,675 to 95,000.  That makes the comps worthless to me.  I have no idea where to start (well, I do, but it simply means I'd have to go back and comp them myself, which I'm not interested in doing if I'm working with a wholesaler.
4) The dates sold go back almost a year.  I'm not interested in seeing any sold properties older than 6 months; preferably 3.

You're going to be wholesaling to investors.  I'm a flipper (rehabber).  I'm going to have different criteria than a strict buy and hold person.  The end buyers are going to be very clear (or should be) about what they're looking for.  Use that to your advantage.  Give them only what they want and nothing else (though you can certainly ask at any time).

Also, based on a comment up above, you may not have had that property under contract that you sent to me the other day.  It would've seriously frustrated me had I spent time looking at the property with the intention of moving forward with you, only to find you hadn't locked the property up under contract.  As a wholesaler, I expect at the moment you contact me, you have the property locked up with the seller under purchase contract. 

If you don't, at the point you contact me, you're simply a bird dog, which is a MUCH LESS valuable service.

....

Don't stop.  You're providing a valuable service to investors.  Continue to get better.  Take this thread as valuable feedback (even the seemingly harsh words earlier in the thread, which were gold to you, in my opinion.  Don't take them personally in any manner.  That's not how they were meant.  Take them and use them to become better).

Keep rockin'.

Is your goal to move into another property with a VA loan?

You don't have to refinance out, I don't think, if you have entitlement left.

You didn't give any specific numbers, but let's assume the duplex was 200K.  

You could still have potentially (assuming NO equity in the property and without refinancing) purchase another property for approximately 217K with no money down (excluding the "high cost" county areas which, if you live in one of them, could provide more than that for you).

Do some more research here:  http://www.benefits.va.gov/homeloans/purchaseco_lo...

Also, a confused mind says no.  Go to a local bank and ask to talk to the lender.  Tell him or her what you want to do.  I think the information may surprise you in terms of your options.

The good thing is, since your original post, you now have 7 months more of equity in the duplex.

Keep rockin'.

I don't have any idea what that is.  Maybe some of the more sophisticated investors could chime in.
Having said that, I think you should just put offers in until you get one. 

Once you have a deal under your belt, I would think you would have something to put into some kind of track record for something like the above (or what I imagine it is).

Keep rockin'.

I wanted to make everyone aware we will be having a meeting together Saturday morning, April 2, 2016. Everyone that is interested is invited from Louisville or the surrounding areas (New Albany, Jeffersonville, Clarksville, Clark County, Floyd County, Scott County, Washington County, Jefferson County, KY).

9A - 12P

Jeffersonville Public Library, 211 E Court Ave, Jeffersonville, IN 47130 (basement meeting room)

We're going to be networking and getting to know each other.

We will be focused on networking. Also, the thrust of the meeting will be determining where we are in our real estate careers and moving each other forward. I see a mastermind / accountability-type of atmosphere. We've been doing this for approximately a month now and it's been very successful. I am not offering to be your mentor, but together I've found it to be very effective to meet and move each other forward. Whether you are a wholesaler, appraiser, flipper (rehabber), buy-and-hold, experienced landlord, newbie, veteran, lender, surveyor, general contractor, real estate agent or broker, whatever; whatever you are is good enough. Wherever you are in your investing career is good enough. Come as you are. We will all move forward together on our goals.

Hope to see you there. Please contact me and let me know if you're coming. The meeting room that we currently have is limited to 10 members. If I know more are going to come on any given week, I can book a larger room.

Nothing for sale, now or ever. No speakers with anything for sale.

Let's do it. Beginner or seasoned. Move forward. Onward and upward.

@Dominick Davis  Did I contact you and tell you what I was looking for?