All Forum Posts by: Taylor Shapiro

Ann Bellamy thanks for the information

Raymond B. Yes, we seem to be few and far between but it's always good to see fellow CTers around! We're currently working on a house in Meriden. Maybe we could meet up for a coffee one of these afternoons...

Min Oh- I see. Thanks for the response. What about specific qualifications to go from a HML to conventional financing? Ben Kahle mentioned I would need 2+ yrs of tax returns, etc. to verify income. Is it as simple as switching from one to the other?

Thanks for the replies guys

I'm interested to hear how some of you full-time REIs purchased your personal residence.

I plan on taking advantage of FHA financing with 3.5% down on a 2/3-family.

What paperwork/records would I need to prove income and allow me to use FHA financing?

Could I purchase a duplex w/ private money and convert it to a 15 year loan?

Brian W.

I can tell you how we do it...

The MLS.

Many here, especially those living in GA, are sharing how inventory is drying up in their area. Here in CT, we've put 3 houses under contract in under 2 months. Each with a healthy spread, each house purchased straight off the MLS.

I see a few bandit signs stapled to telephone poles around town. Not sure how well they do at pulling leads though.

It is easier said than done, especially in the beginning, but if you know what properties will sell for once fixed up, what repairs the property needs, etc., all you need to do is start sending in offers that work for you and wait for a response. Obviously i'm generalizing a bit here but hopefully you get the idea.

We use cash and a quick closing to get noticed. The investor I work with has a good relationship with a few REO agents in the area. Hard money loans will get you noticed as well. See if you qualify and start making offers.

I highly recommend you try and get in touch with a local investor and take him/her out for a coffee or see if you can work for them. It's amazing how much you can learn in a short period of time.

Good luck

Hey Jason

I haven't personally looked at the links provided by others but I'm sure there's plenty of great advice in them.

One day I decided to check the real estate jobs on craigslist and happened to stumble upon an ad that basically said "veteran real estate investor looking for help with rentals and flips. Will pay hourly to begin with, open to negotiating. In return for your hard work, I will teach you everything I know about real estate".

I responded to the ad (along with 70+ other people I later found out) and kept hounding the guy once he gave me his phone number to contact him with. We met up for lunch one day and the rest is history.

My point is- there are MANY ways to find a mentor, just as there are many ways to find "deals". There are REIA meetings, friends of friends, CL, newspaper, cold-calling, etc. Just put yourself out there, be patient, and sooner or later you'll meet up with someone you connect with.

Just keep going

Hi J Scott, thanks for the response.

For this next one, I will simply be managing the rehab. The house is already under contract and I had no involvement in its acquisition although I will be interviewing realtors once it's ready to be put on the market.

As far as my scope of responsibility, I will contact, interview, and negotiate prices with contractors. There is no GC so I will be managing them as well.

Right now I make $12/hour and anticipate spending as much time as needed at the property whether it's spent swinging hammers, managing contractors, or any other jobs that will speed up the process. I'm guessing at least 40 hours.

The only experience I have is from this past rehab- which clearly isn't much at all although I was there every step of the way watching him speak with contractors and come up with/price out the scope of work. Realistically, I would say I can absorb 40-50% of the workload but then again, I don't know what i don't know.

As I said before, I'm not expecting a significant percentage nor do I intend to aggressively negotiate for one. Just curious to see what you would find appropriate for someone with all of the experience, money invested, and risk!

Thanks

Hello all,

So it's been a few weeks since my last post. We're coming to the end of my first flip experience and it's been a phenomenal experience.

We've received verbal confirmation on 2 more deals and will close on them by the end of this month.

The investor who I work with briefly discussed how he intends to make me project manager for one of the flips, continue paying me hourly, [i]and to give me a percentage of the total profit. This way I have the incentive to maximize ROI.

I remember reading how @jscott hired a full time PM and includes him in on a percentage of profits. Being that this is only my second rehab, and my first time managing a project on my own, what should I expect to be given as a % for this next deal?

To clarify, I don't necessarily intend to "negotiate" my % on this first opportunity. I've found myself to be in an incredibly fortunate position with this individual and recognize that there will be plenty more opportunities after this one. Any percent will do for now as I am still just learning. I'm just wondering what a fair split would be if he were to put up all the money and "be there for me" when I need help with the process (i.e. calling his cellphone) while I'm there all day managing the crews and pitching in for whatever needs to be done..

Hi Sam

I completely agree with J Scott's entire response, especially his last paragraph. I'm a little embarrassed to admit it but looking back a few years ago when I first started focusing on REI, I thought I discovered "the secret" to making TONS of money on a CONSISTENT basis by flipping houses- just like the "guru's teach it. I was new and was focusing on all the wrong information, because just a few short years later I can tell you that it's NOT quick and easy- although it can most certainly be done!

As I mentioned, I am new at this but I have the privilege of apprenticing under an investor whose rehabbed over 125 houses. According to him there are "only half a dozen or so" others who rehab houses as consistently as he does. This goes without saying that the community is VERY small which leaves little room for mistakes if you or I or anyone else wishes to wholesale houses to them on a consistent basis.

The guy I work with is extremely busy too. He has rentals, rehabs, HMLs, personal life and much more to worry about on a daily basis which leads me to my point...

Make sure you know as much of the financials as you possibly can. J Scott said "work hard and find good deals". True, but obviously extremely vague. You need to know how much the house will sell for- the REAL ARV! What about repairs? How do you know that's all the house needs? We're half way through my first rehab and small things are popping up which have tacked on an additional 2K than previously estimated.

Bring these guys a good deal. Read the thread others have provided. I wanted to chime in because I've been where you are and remember how daunting of a task it was to understand it all. Again, I am new to this but finding good deals is always essential.

Thank you all for your responses.

Michael Woodward- I appreciate your insight and congrats on making progress towards delegating a majority of your business. Right now, as Will Barnard recommended, I'm participating in as much of the process as I can. Fortunately for me I'm working full-time for this investor which significantly reduces any risk. Although it's nice to make more money on each flip, it's understandable that you'd rather make a little less if it means you save time doing the work yourself.

Bill Gulley and J Scott, I've managed to decrease the amount of strokes it takes to hammer in a nail every day so far. How's that for working on my business :). For the first few rehabs, my mentor and I agreed I'll be doing as much of the general labor as I'm capable of. Once we start buying more houses, I'll transition to more of a project manager role, still being paid hourly but getting a % of the net profit as well. Assuming things go well, after a few years he and I will partner on deals and delegate the management of the project (a solid plan as far as I'm concerned until I learn my market, am able to consistently find deals, and finance them on my own, wouldn't you say so?)

Levi Gale- I'm looking forward to the day where all I have to do is hang some blinds :)

So last week we closed on a single family that we plan to rehab and resell. I mentioned in an earlier post that I've begun working with an investor in my area who has agreed to take me under his wing. As a way of helping me oversee and understand each aspect of the process, I have been hands-on with every task so far.

The house has been demo'ed, sheet rock has been patched and compounded, we started painting the second floor, rewired the electric in the bathroom/ master BR, and the list goes on.

I understand how important it is for me to experience each part of the process so that I know how to do it, how long it should take to complete, and how much it should cost. I'm curious, however, which parts of a rehab do you guys participate in? Do you demo your own properties? Structure the financing only? Electric? Plumbing? Selling?

So far I've enjoyed swinging hammers and getting down and dirty but i can see from a point of leveraging my time and resources that there will come a day when I should hire out most of the work.

I'm wondering- what specific parts of the rehab do you feel the need or desire to complete on your own and why?