All Forum Posts by: Steven Goldman

Hi Anna, I would sell the SFH and use the proceeds to straighten out the house your mother is living in. It is a universal banking requirement that you can not have mortgage lates for 24 months prior to applying for a refinance. You will also need a much higher credit score. Your best option is to sell the SFH and use the cash to bring the 2 family current. No pain, no gain. Good luck.

@Chance Stem   

As a realtor you know that you can be successful almost anywhere if you have a strong team on the ground and access to sufficient information to make good decisions. We have originated loans in Kentucky and in less attractive places then Knoxville. We have found that it is neighborhood by neighborhood almost anywhere you go. That makes a strong realtor with experience in the investment space a necessity. I believe that the key to to success in the fix and hold space is purchasing below market value. That really requires a real estate professional who knows how to find good deals not just send you a link for the MLS. That person must also be able to give you an accurate after repair value!

Most good deals are off market! Good luck!

Their are a few rehab. lenders who will approve an inexperienced borrower.  I would make sure you get enough quotes to compare fees and points. The rehab. lenders who will lend to a newbie, will not allow the newbie to general contract the job unless it is a really light cosmetic rehab. The greater the size of the loan, the more you will need for a down payment on the purchase price and the higher the risk, the higher the rate. I always suggest that you have a broker who has personal rehab. experience review your options before making a decision about a lender. The broker will know which lenders works best with a newbie. They can also tell you who has a easier and less problematic draw process and assist you with creating your scope of work.

Of course in full disclosure I am tooting my own horn. Regardless, you need to assemble a team of knowledgeable vendors who can guide you through the beginning of your rehab. journey. Having a good agent, broker, insurance agent and title person can help you avoid mistakes that many newbies make.  Good luck,

@Diego Leos  

I also do not think its optional if they are going to make an assessment for roofing replacement. Just make sure you disclose the existence of the roofing assessment. If the property is not under contract when they begin work than increase your price to encompass the expense. A metal roof has 40-70 year useful life compared to 30 years for asphalt shingles. You can use it as a selling point. 

@Nicole Harrington   

If the feedback you are receiving is that you need a second bathroom so be it. Anytime we rehab. a house with a single bathroom we add a  bath with shower enclosure to the project. It may not  increase the purchase price in a falling market. It always reduces the selling time. Most people do not want visitors using their main bathroom. Good luck. 

@Hope A. Williams    

Hi Hope, I just wrote a comment on this subject for another member. It seems clear your contractors personal problems are spilling over into his work life. This is a big red flag! Many contractors fail because of personal habits, divorces and other distractions.  If the contractor is currently overpaid than you should not advance one single dime to him until he completes the work that was covered by the payments he has already received. You do not want to be paying for his lawyer, child support or worse. Unfortunately. you should begin planning to replace this contractor. You should also find out  about the laws in the State that you are building in regarding contractor's miss using funds. Many states have new contractor fraud statutes resulting from just the situation you are  describing. I am sorry to be the bearer of bad news. The longer this drags on the bigger  the problem you are going to have to deal with. I hope this works out for you!

The appraisal will compare the final number of units to other recent sales of multi family homes with the same numbers of units. Here is anarticle that discusses valuing multi family properties.

https://apartmentpropertyvalua...

@Robin Lee                                  

@Charles Carillo  is spot on regarding the need to upgrade or replace the basic structure and systems. I think the balance of your questions depends on whether you have sufficient capital to complete the rehabilitation all at once, or do you need to get the cash flow started to offset your expenses. There is economy of scale if you do all of the units at one time. You should be able to negotiate discounts on materials, fixtures and appliances from a supply house by buying in bulk. I would price out the entire job and than compare that to what the costs will be doing it as single units. It is easier to schedule the work, even if you are doing it yourself, by timing all of the phases at the same time. Less delivery expenses for materials as well. Good luck.

I personally have not lost money in the flipping business but I sure know a number of people who have. The number one reason people fail at flipping: They pay too much for the property to begin with. Always make sure you are buying under or at low value. Second, many rehabbers try to fit the construction budget to their pocket book. That does not work. You must be able to afford to rehab the property to the standards required to get the ARV you are projecting. If you cut corners you lose or break even. (That is also also a loss as you've wasted you time. Which is your most precious commodity).

Unscrupulous general contractors are another major reason that projects fail. If you are using a contractor make sure you get a complete written contract (With scope of work and materials clearly defined) and only allow changes that are evidenced by a signed written change order. The change order should contain the cost of the change in the work. Talk to people who have used that contractor recently and get their opinion of the timeliness and the quality of the contractors work.  An old recommendation is worthless because contractors evolve over time. One that was good two years ago may not be good today. Also either you or someone you trust be on your job site regularly. This avoids costly construction delays and disputes about the quality of the work.

I believe in attaching yourself to a meetup or group in your area and to pick the brains of the more experienced rehabbers who attend. Than put what you learned to work on your project.

                                                Good Luck!

Yo Quentin I have a few years in real estate and, a little knowledge. Iif you want to call and discuss anything, just reach out. As Arnold's last rule says: "Give something back" 

• Trust Yourself.
• Break Some Rules.
• Don't Be Afraid to Fail.
• Avoid the Naysayers.
• Work Like Hell.
• Give Something back.