All Forum Posts by: Justin C.

Nah, i think its a great idea. Have your attorney customize an agreement. Just realize the real trade off... You are giving them $5k in exchange for a "sale" of a property. Basically no contingencies. And if you back out or they back out you are completely dependent upon their morals and ethics to get your money back. This is why escrow companies were born. A check however can be tied back to their agreeing to a contract. By them cashing it they agree. That is enforceable. What about this... get your hard money or private money lender agreed to fund that specific property and present your sellers with a contract that says cash deal, $5000 deposit within 24 hours, no contingencies, and closing within 10 days. Thats what we do and its pretty motivating to anyone who wants to move quickly. Good luck

Originally posted by @Kelly N.:

Do you have a Menards near you?  We have had a couple an hour away for a while, they recently built 2 within a half hour (yay) and are planning on one right in my town, so it will be closer than Lowes and Home Depot!

Anyways, at least once a quarter, they do an 11% rebate, so you can plan accordingly.  Of course the rebate has to be used at their store, but in this business we always need something from a Home Improvement store!

Check craigslist and garage sales for tools- I bought a $300 Dewalt chop saw for $50 at a garage sale, only thing wrong with it was a cracked blade guard.  

Kelly

 I wish we had a Menards!!!!!

Wow!  I didn't know Lowes matches Harbor Freight coupons!  I'm willing to bet thats a store managers discretion though but certainly worth a shot.  

As far as the Home Depot contractors discount, I'm not really buying all that much in advance.  At least I'm not that good at planning THAT far in advance : )  Its usually a few hundred bucks every time I walk in there.  

Renovating without water is really not that big of a deal if you plan accordingly like I said.  Especially at the very beginning when your in demo phase and tearing everything out anyway.  Every situation is different i guess.

Thanks Lee

Get a good lawyer to review the contract.

Originally posted by @AJ S.:

Great story, how did you get cash out of credit card or renovations or other cost, that usually considered cash advance?

The holding money and a large portion of the renovation money was included in the original loan. I will hold onto this cash and try to only use it for laborers, utilities, taxes, and minimum monthly payments on the credit card. No cash advances needed so far. Remember, I only need to buy myself 5 months or so. Then I will cash out refinance at the ARV value and pay off all debts. Although I do not recommend leveraging credit cards, mine is at 0% and I have a secure plan B if all hell breaks loose.

Originally posted by @Leotis Hightower:

Justin C thanks for the response. Finding private investors is the key.

Building great relationships is the key : ) 

I am about 90% complete on renovating a 100 year old SFH and have learned several ways to be frugal which I will carry into the renovation of my second property. I thought the BP community would gain from my experiences:

1) Do ALL of your demo at the beginning.  Then, if possible, rent a Uhaul or Penske and have help loading it and then take it to the landfill/dump yourself.  A dumpster costs me $450 or so for the week and the above is $175-250 depending on how much debris I have.

2) Do not start garbage services at your investment property.  My city doesn’t collect “construction debris” and boy are they picky about classifying EVERYTHING as construction debris.  I live in a different city and they couldn’t care less, so I’m forced to take my “construction debris” home with me.  Yuck!

3) Do not start water service at your new property until absolutely necessary.  My city charges a $29 “convenience fee” per quarter fee for being connected to the sewer lines.  Just make sure you tell whoever you have working at the house that there is no water service.  Believe it or not, workers like to be able to use the restroom and be forced to leave.

4) Plan ahead and buy hardware online.  I have saved literally hundreds of dollars on hardware like hinges, door knobs, window locks/fixtures, screws, etc… on ebay.  Ebay is a great resource for used or discontinued hardware.  Seriously, plan ahead and check it out.  Also, craigslist is great for large items like doors, cabinets, countertops, vanities, etc… and even tools!  I bought a compressor and brad nailer, and a dewalt sawzall for $150 off craigslist.  Additionally, If you can swing it... buy a good drill.  I was using my Craftsman Evolv and it got it’s a*s kicked midway through this renovation.  Instead of spending $50 on a new battery, I went ahead and bought the Dewalt impact/drill combo pack and couldn’t be happier.

5) Water heaters can also be saved for a last minute turn on. No use in heating water for an unused house.

6) NO Balance budgeting. Always make sure your utility bills are based of actual readings and not estimates.  

7) I put everything I can on a 0% credit card and hoard my cash for laborers.This allows me to earn points that I use for statement credit which really adds up.  Also, I pay a few dollars more than the minimum each month to earn that “paid more than minimum” line item on my report – for whatever that’s worth

8) Sharkbite.  Pex.  Seriously.

9)Harbor Freight is a great resource for buying tools that you will seldom use.  Although, I will say that I bought their varial speed multipurpose tool and its been priceless.  Make sure you have a 20% off coupon at all times.

10) Shop at your local hardware store for your odds and ends.  Their experience is invaluable and they generally are the best people to solve all your issues.I have a family owned ACE store down the road and all of them are landlords or involved in some degree of real estate investing.

11) Always continue to ask yourself “what is my goal?”  This keeps me on track and prioritizes projects.  I was about to start fixing windows when I really needed to start the drywall process.  I would have wasted 10+hours on only focusing on windows if I didn’t ask myself this question.  I was therefore able to regroup, start my drywall and do windows while the newly applied mud was drying.  I worked one room at a time and established a system of sanding immediately upon arrival, mudding, then doing something else for the duration of my time.  Rinse and repeat this process and I was able to bang this portion out in a relatively quick time frame.

And lastly, this has to do with time.  You cant be frugal with time.  You must be efficient with time.  DO NOT arrive at your investment property without a gameplan.  DO NOT leave your investment property without a list of materials and a gameplan for the next time you’re there.  If you have a family, this means leaving your house when everyone else is sleeping and arriving back in time to get the kids on the bus.  This means using your lunch hour to work on your properties.  This means arriving home at a reasonable time - everyday.  Be super efficient.  Maximize “your” time and minimize family time.  Your SO will be very much appreciative and very much supportive.

Let me know if there are frugal approaches that you’ve discovered while renovating homes.

Cheers!

Originally posted by @Stephen Qualls:

congratulations, I am working on my first deal, hope it works out. Having help from a partner always helps.

 Good luck Stephen : )  Having a supportive realtor and mentor is a big plus but honestly, its the will power to figure sh't out that makes it happen.  Thanks!

Originally posted by @Joe C.:

It's inspiring to hear success stories such as yours. 0-down is not as elusive as I thought. 

I also love the use of balance transfers for real estate investments...except in my case it has been for notes. Works out great if the ROI is greater than the 3% transaction fee and 0% interest. That 3% can translate to just 1.5% if you have 2 years to repay the balance. This only works if we keep the payments on-time otherwise the rate can sky rocket.

 Thanks Joe

Originally posted by @Allen Lucas:

I would personally need a little more positive cash flow in my pocket a month. But congratulations on your 2nd property. 

Hi Allen, dude... I have $0 out of pocket. $0. Whats the cash on cash return when you have 0 cash in the deal and $1800p/y cash flow? Nevermind the 35% discount by the time its all said and done. These are great numbers for a SFH : )