All Forum Posts by: Sam Valme

Hello BP Family!

Thanks for taking a look at my second post regarding my companies new business plan. For some context to this please see my first post P1: Capital Acquisition. For those just joining the game. I've broken down my new approach to the BRRRR & Flip scenario and I'm looking for feedback on each phase of my plan.

Below is my current write up on Market Analysis. This essentially will be the step we take to determine if our model is a good fit for a geographic region. There are a lot of factors that go into his determination. We're looking for the right questions we should be asking when doing this kind of research. Any and all feedback is welcome. Thanks again in advance! 

• Population Demographics
• Tenant Type (A,B,C,D,F)
• Acceptable Rents & Average Home Purchase Prices
• Market Industries & Development
• Determine Major Industries supporting population
• Research new builders coming into area
• Leverage RSS feeds and Google Alerts to get updates
• Investment Criteria
• Based on Demographics and Market Research determine IDEAL Buy & Hold and Flip Criteria

Questions:

1. How to the Pros perform market analysis?
2. What other criteria is used to analyze a potential market?
3. What limits a "Market"? Neighborhood , City, County?
4. Best methods on getting up to date news on your market?
5. How often should you reexamine to redefine your criteria.?
6. Are there any pre-defined criteria on Tenant Type?

Hey BP Family, 

I have a couple of questions I could use everyones help with. I am building what will end up as the basis of my companies new business plan. In an effort to keep the responses specific I'm going to break up my forum posts. The first one has to do with Capital Acquisition. 

We're looking to Implement the BRRRR & Flip strategy depending on how the property meets my criteria. Below my current strategy to acquire capital from private investors along with some questions I have. Please provide any feedback that may help me build out our thought process a bit more. Thanks in advance!

Private Money for Initial Purchase

• Terms of Private Money
• 1 Year Loan - Interest Only Payment at 5-9% (The goal is to pay the lender back ASAP)
• Contingencies for Extensions and Loan Conversions After 1 Year loan.
• Step 1 - 1st Extension (3 Months)- 1% Rate Increase Interest Only
• Step 2 - 2nd Extension (3 Months) - Rate increased to 15% APR
• Step 3 - Loan Conversion (5,10,15 Yr)- Convert to a Note at 5, 10, or 15 Yr. Loan payment at 15% APR (Depending on property performance to minimize loses)

Bank Refinancing for Long Term Holds

• Refinance Network
• Primary Lender - Presented Deal prior to closing on property, understands ARV, has agreed that if #s are correct Refi is possible.
• Back up lenders 1,2,3 - Attained through referrals and past work. Can be contacted quickly and understand business plan and methodologies if Primary lender falls through.

Questions:

1. How would I handle deals that require more than one lender?
2. What do I need to present to a bank to get help refinancing
3. What legal documents need to be generated before money can be transferred from investor?
4. How is the money transferred? e.g Any issue moving $50,000 from one bank account to another? $100,000?
5. What legal documents need to be created to detail interest rates, extensions and loan conversions?

Hello @Selina Rifkin!

As @Jacqueline Carringtonsaid, Welcome to BP! This is a great place to build a network of resources to begin your journey in REI. A great place to start is the podcasts here:

https://www.biggerpockets.com/renewsblog/category/...

They walk through the stories of investors who come from all different backgrounds. Its really interesting to hear all of the different strategies folks use to make themselves successful. Another good spot to start would be the regional specifics forums. Connecticut's are here: 

https://www.biggerpockets.com/forums/550-connectic...

Post your questions and reach out to experienced investors who can get you on the right track! 

Best of luck on your journey!!

Hey @Monica G.! 

Welcome to the BP Community! Financial Freedom and Being in Control of Your Future is the pinnacle of every investors mindset imho! A great place to get started is a place like BP! Something that has really helped me out is the Podcasts hosted by Brandon and Josh. You can find them here: 

https://www.biggerpockets.com/renewsblog/category/...

Another thing would be to check out some Books/Audiobooks! 

https://www.biggerpockets.com/renewsblog/2013/04/1...

The above link will take you to the 21 recommended books to get your started. I prefer the audio books personally. If I had to pick one to get started it would be Rich Dad, Poor Dad. Definitely changed the way I think about investing and spending money in general.

Best of luck on your journey and definitely leverage the forums for any questions!!!

Hello @Gabriel Turner! Welcome to the BP community! There are a lot of places around the site to learn about pretty much anything REI.

This blog might be a good spot to start for Wholesaling : https://www.biggerpockets.com/renewsblog/2015/01/3...

If your interested you can check out the Market Place as well to see what others are currently doing! And of course https://www.biggerpockets.com/meet is a great place to connect with other investors in your area. Make some connects and reach out to folks that have already started! See what makes them successful! 

Good Luck!!

Hey @Rush Wall, that was my thought as well. I didn't write down the number because I was driving. But if I see it again I might give them a call just to see what they have to say.

So I'm headed to drop my car off for service at the dealership and I see this sign. "Real Estate Investor Seeking Apprentice. FT 10k PT 5k". I used to just ignore these signs in the past. But I've seen them before. Now that I've been on Bigger Pockets and have a forum to ask. 

Does anyone do this or know what its about? There was a phone number to call. Which I don't plan on calling. But as someone starting out it did peak my interest. 

Thanks in advance!

Very good article! Its very good to get an idea of how to put a plan like this together.

@Russell Brazilthis is very interesting. How do you go about predicting these paths? I guess I looked at appreciation as more of a "drop in a puddle effect". The epicenter of the development sparks the surrounding areas to accommodate to the new business brought in. But from what your describing it sounds like it follows more of a linear path. 

This makes since actually. I heard Brandon and Josh speaking about how their own neighborhoods on the podcasts. Having drastic price differences from one block to the next. Sounds like I'd need to take a more boots on the ground approach to really understand these movements in the market. 

What do you look for to determine where these gentrification paths move through an area?

Hey @Russell Brazil! Thanks for the quick response. Thats some interesting insight on new constructions. I actually hadn't considered that developers may want to build in the area because of the new studio. When I meant "development" I was speaking more towards the studio and the jobs it would bring. 

The areas that I were looking at the current houses are valued between 30k - 120k. Much different then our area in DC haha. I was looking at investing in some of these multi families around the 30-50k range. Implement the BRRRR strategy. Then hope for the studio being built in the area to even further increase the appreciate of the homes. In addition to the rehab.

Using the calculator on BP I was looking at 15-20k profit with the current values if I wanted to flip a couple at first as well. Ultimately I want to buy and hold for the cashflow. But from the research I've seen. Would you agree that besides forced appreciation with a rehab. Relying on appreciate because of outside factors in a market are difficult to approximate?