All Forum Posts by: Steven Goldman

Dude the last thing you want to do is use 100 percent of your money to BRRRR. You typically borrow up to 75-90 percent of the purchase price and 100 percent of the rehab costs. On your first deal, most rehab lenders will not lend you more money for the rehab than the purchase price. Your rates will be determined by prior experience and credit score. We wish you luck with your first rehab. Good luck.

Good luck with your first rehab. Try, your local real estate meetups. We have met many great teammates at real estate meetups. 

Ensure that all contractors base their bids on the same scope of work. Otherwise, you will be comparing apples to oranges. 

If you get references from your contractors make sure they are current references and not stale. 

Don't make your scope of work fit your budget. If the deal does not work walk away.  

Quote from @Carlos Garcia:

So I started these last 2 flips and finished the renovations within 45 days. We put both houses in the MLS and have had to reduce the price by more than 14% and still no offers. I am getting a little scared as my wife is an experienced realtor and is experiencing the same across all her listings in central FL. Our business real estate coach has also shared that the entire US is like that in almost all the markets.

This is the first time this has happened to me.

What are the recommendations?

1. continue to sell

2. DSCR loan

3. other?

Both houses were financed via Hard Money at 11.99%.

Hi Carlos: If you have enough cash reserve refinancing and renting these properties may be your best option. Can they be converted to STRS? That might be an option. The market projections for South Florida and central Florida are for the market to continue to decline due to the insurance crisis and the rapid appreciation experienced since COVID-19. I would move quickly. Time is not your ally. Good luck.

Quote from @Myriel Pita:

Looking to invest in a STR in the Smoky Mountains, TN. What's the COC return I should expect in this market in 2024?

Our experience is that the area is very overpriced for available STRS. Lenders are very cautious with this market considering its values. Lenders will lower the LTV on this type of collateral to protect themselves. Good luck. 

@Wai-Ming Lau  Not only is it reasonable I would not do the deal without it. Good luck.

As a long-time broker for Constructive, I am sorry to hear you had a bad retail experience. While utilizing a broker can be more expensive, the broker has a long-term relationship with the people they work with at the lender. They can make the mortgage process much smoother and less stressful. Many investors are penny-wise and pound-foolish. They want to be a jack of all trades. Investor and commercial financing is not the same as buying yourself a home. I suggest you find a mortgage broker and develop a long-term relationship so you receive kid-glove service and get out of the financing process. Good luck. 

Out of state flips are very risky. You must develop a trustworthy team and then visit the properties even if they are a distance away. If you can invest in a location where you have friends or family who can be your eyes and ears on the ground you are more likely to have a positive outcome. It is important that you control your funds and do not let he contractor get out ahead of you or you will be left with a overpriced unfinished rehab to salvage. 

Quote from @Yocheved Beer:

Hi all,

I have found a house in Lehigh acres Florida for a purchase price e .75 of of the appraised  value and it is for sure a 1 dscr.

can I immediately buy this for  0 Dollars down

Hi Yocheved:

One of the cardinal rules in real estate is that you have to have some skin in the game. Rather than try to find a way to buy the property with no skin in the game I suggest you find a partner with some capital and share the deal. either that or wholesale the deal if it is for sale substantially below market value.
 
Have you thoroughly researched the property and its expenses? In Florida some of thereasons a property might be on the market for less than its market value:

1. High HOA fees
2. High insurance costs

If you have done all of your due diligence and it is a really good deal find a partner with the capital or put the cash in yourself. Good luck!
 

Quote from @Uendy Garcia:

Hi Everyone, 

I am new in real estate, purchasing my very first investment property. My partner and I are under contract to buy a SFH in Fishtown, Pennsylvania. The house is build in 1875. The inspection showed more issues than what we anticipated. I am guessing this is common for the age of the house.

We are negotiating to get it under 200K, and invest 65-70K. Based on our calculations for repair, carrying cost, closing cost, the all in cost will be 283K. Once we sale, based on other comp in the area, our net profit will be around 30K. My question to you guys is...would you go through a flip for 30K or less before taxes. 

Thank You for suggestions!!

Uendy Garcia

Hi Uendy, we are rehabbers and lenders in the Delaware Valley. We purchase in Upper Darby and Drexel Hill. I have also rehabbed in Brewerytown and University. I would pass on any project that does not have at least 45k clearance. In Philadelphia, hidden problems are just around the corner with every L & I inspection. Also, you need to know the rules regarding licensed contractors and tax abatements. 

I would pass on this deal with a thin profit margin. I like to see a minimum 50k spread on any project. The greater the total costs the higher the spread. Remember, a rehab project is not static. The reward must be greater than the risk. Good luck!

Hi, account closed. You will not be able to get a certificate of occupancy in Philadelphia until you have rehabbed the property. You will be required to submit plans and use a Philadelphia-licensed contractor. If you decide to go forward you should make sure you camera the sewer pipe to avoid a surprise expensive problem. Philadelphia L & I can be aggressive so you need to be permit compliant to avoid major issues with L & I. You will be entitled to a partial 10-year tax abatement from the day you pay for the permits. Good luck.