All Forum Posts by: Crystal Smith

I have found someone interested in selling their house using wholesaling but they have already started talking to a realtor.  I would like to work with the realtor to get the job done but previously realtors have ask me how they will be paid. What would be the best option to make sure realtors will be paid in a wholesale transaction (listing or buying agents)? Thank you.

My company leases a property from a private landlord in Glen Ellyn, with permission to sublease. A leak from the wax ring of the toilet was recently discovered and reported. I notified the landlord immediately upon reporting by the tenant, on Saturday, May 25. I asked for it to be addressed as soon as possible, but the landlord stated she would hopefully attend to it the next week, that the damage was already done and it could not be attended to over a holiday weekend. A plumber was scheduled for a service call on May 31, but the call was rescheduled to June 1 due to an emergency call. Remediation arrived today and will put dehumidifiers in the space. After the space is dry, they explained that part of the floor in the bathroom will need to be replaced. Now I have to relocate the tenant, pay for hotel accommodations and the home is not habitable. 

The landlord stated she believes we are responsible for the leak because when we started the lease in November 2022, the leak was not present. She has stated that she will not file an insurance claim and instead expects my company to be responsible for the cost of repairs. I explained that this type of routine maintenance issue is not damage and is not our responsibility, but I can see that I will need help ensuring that she as the landlord is instead held responsible.

Any advice on an attorney/organization to talk to in order to get a letter from an attorney to get the landlord being reasonable or similar instead of turning this into an expensive legal battle?

Thanks in advance!

Me and two other partners are flipping houses locally and are using a local individual for the financing. We’ve done a few deals to prove things out and so far so good.

The structure has been we are loaned the money at 0% but the lender is getting a big chunk of equity. Deal #1: 70%, Deal # 2: 50%.

The lender is using a line of credit at 8%, so he does have interest expense, but not passing that on to us.

Really my question is, what’s a long term structure that makes sense for both sides?

Lending at 0% is great but is 50-70% too much equity per deal?

Is there a structure that makes more sense?

Should we offer preference and less equity?

Thanks!

@Crystal Smith Wow thank you, your response is very thorough and helpful indeed. When you first started, did you have a mentor/business advisor that help guide you through your journey? What helped you with decision making? We know how to run numbers and do as much research, but when it's in the scheme of things and dealing with real people, negotiating...it's high pressure and gets overwhelming especially since we're new to this world.

Hi there,

My partner and I are trying to find our first flip.  Although I have been following and learning from BP for years, we are both brand new to this, and I think we may be about to pull the trigger on a mistake, and I was hoping to get advice here before I cancel our offer.

The property is in the 30349 area of Atlanta.  

It is a four bedroom, two bathroom, split level house needing approximately $20-30k of repairs.

The purchase price is $177,500.  We tried to get it for closer to $160, and the seller wouldn't budge more than ~ $2,500.

Our realtor sent comps and has been assuring us that relisting for a minimum of $250k is realistic and creates a good profit margin.  Our offer was accepted yesterday, and our five day due diligence is supposed to start tomorrow.

From what I have thoroughly studied on the comps, they do sell within a decent time frame and for much higher than the purchase price, although the majority of comps are slightly larger in sqft. (They are all selling in the $260-285k range).

I'm sitting here trying to learn and absorb everything, and working on the rehab budget.  While we plan on doing a lot of the work ourselves, we are realistic with our limits and will need to hire much of it out.  After using a couple of deal analysis tools, I feel sick to my stomach that this may be a big mistake.  

We are using a hard money loan at 9.9%.  After analyzing the deal further, estimating holding costs, realtor fees, monthly costs on hard money, estimating the worst case scenario of it taking three months to sell (average time here is 43 days), rehab costs, insurance, etc., I am pretty sure we need to pull out.  I feel stupid for not realizing this in the first place, because if I did the 70% rule correctly, we would have to be *negative* $2,500 in repair costs to make it fit.

Am I missing something here?  Is this somehow a good deal and I am messing up the numbers, or should we run?

Thank you.

Hello,

I am currently in my search for my first fix & flip. I have found & recently looked at a property that I feel has potential. I’ve been reading the BP book on Flipping Houses by J Scott as a guide. I recently had my broker run some comps for me however there are limited SOLD comps to work with however there a few strong comps that are currently “contingent.” Would like at least 3 solid comps to work with.

My question is, is it good practice to use comps that are contingent or pending or should I stick solely with comps that have SOLD? 

Thanks,

Hello, I just graduated college (in 3 yrs) with a finance degree and am finally ready to go all in on real estate investing. The thing is I don't quite know where to start especially in today's economy. I have read a number of bp books and have built up a solid amount of business knowledge especially in marketing as I have helped with a number of marketing oriented projects at my church. Also, I have about $8k in cash and no debt at all!  I'm going to start looking for a few meetups each week to go to and analyze properties daily.. I don't have a job at the moment aside for working at my church on the side. Any thoughts, suggestions, etc.?? Thanks all

Hello BP Pro!

I'm new to RE investing and have signed up for the bootcamp as well as classes at my local JC to learn as much as I can. One thing I've noticed is that of all the things needed to start out, money is definitely high on the list. 

Are there strategies or options you can recommend to someone like me, who is both just starting out and has limited funds (worst combo ever?)?   

@Crystal Smith Thank you for your thorough response. Can you elaborate a bit more on this part "Another part of our strategy is to invest with someone at a local level. which meant we became local through our partner...."?

Making sure I understand correctly on this other part. It sounds like first you meet your team in-person to create a relationship with them then you work with realtors to find property you would eventually put an offer in (unseen) then once you're under contract that's when you get the remaining team to check everything. At what point do you travel there? Is it when the inspection/records/finances are all in a good place...giving it a final look before closing?

Also, how do you find reliable realtors to work with? We worked with a few realtors and all were good in their own way however, there were some gaps. For example, the first realtor viewed the property for us but missed out major damages until I flew in myself and saw the property. The 2nd realtor doesn't have any investment background, didn't have advice on best rental property and the 3rd couldn't find any properties while the 1st realtor found plenty that matched our criteria. With that being said, we had a challenging time finding a realtor who specializes in investment and can be more detailed/open with us.

About the pre-inspection, we'll have to factor in the cost. But it's a bit less than full inspection. This was a suggestion by another investor. I guess this would another layer of protection before committing to a contract that will cost more money. I get what you're saying about timing though.

Looking to connect with a friendly agent that knows the Ohio market well. Looking to invest in MFH And SFH .