All Forum Posts by: Account Closed

@Pravalika Gokulakonda Welcome to BP! I'm in Southern Ocean County and always looking to connect. Feel free to reach out with any questions you may have, I look forward to speaking further. 

@Jared Lundy Welcome to BP and congrats on getting started! If you haven't yet, check out some of the books from BP and other sources about getting started and managing a BRRRR or fix and flip. How much experience do you have in repairs, either doing them or managing them? Having a reputable contractor to complete the work will be huge on your first investment. The biggest concern is finding an honest contractor who won't take advantage of you.

You mentioned getting pre-approved for a loan to do a BRRRR. With that said, is your lender ok with a property that needs complete rehab, or are you looking for something that doesn't need as much work? Some lenders may be wary to lend on a home that needs major work such as a roof. Lastly, have you looked into house hacking with a multi-unit? IMO, it's one of the easiest ways to get multiple doors going with one loan.

@Cristian Gaona I can't speak for the CA market directly as I know it is extremely competitive but; you could try driving for dollars, door knocking, speaking with property managers, calling landlords with homes for rent, etc and try to generate an off-market deal. Working in your own background is great IMO because it's an advantage you have in terms of knowing the communities and neighborhoods. Personally, I solely focus on my area right now because I know the surrounding towns in terms of demographics, average wealth, crime rate, climate, flooding issues, and so forth. I can much easier come up with comps and know who my target buyers might be. This can be done virtually as well, just prepare to spend some time researching the area. If you have friends or relatives in other areas, leverage their expertise of the area and they can be your boots on the ground (don't abuse their time of course) and you can reward them financially if a great deal comes along!

@Chelsey Nunez Welcome to BP! Just about any deal can be worthwhile depending on the merits of the deal. Depending on what you can get it under contract for, repair costs (might need a professional estimate(s)), and what the comps are going for, it could very well be a deal. It all depends on how much room there is on the deal. Sometimes it's the really ugly, or burned up houses, that do really well! Good luck with it.

@Kirby Kernen Welcome to BP and congrats on getting started! Personally, I would not use home equity to cover the costs of a vehicle. The vehicle has no long-term appreciable value and will only cost you money - it's a liability per Kiyosaki. You would be using money from a typically appreciating asset such as your home into something that loses money. Freeing that money up would be great for your rentals but you could always use cash flow from obtained properties to pay off the truck faster if you wish, work more hours (if possible), sell it, etc etc. I don't mean to be harsh about the truck as I know the pain of making payments on mine (almost done!). 

I prefer to have an LLC to protect your personal assets. Consult with an attorney in your area who specializes in it, it will cost you a couple of hundred dollars and you will have a barrier from lawsuits that can protect your personal assets. As for the plan, doing a cash-out refi and using the money into a new primary residence could work very well. Have you considered purchasing a multi-family property so that you could house hack? You could purchase a fourplex with the loan, live in one, and rent the other three which should cover your mortgage entirely. It all comes down to the numbers in what your market will allow for rents and what your expenses would be. Please reach out with any questions.

@Richard Evanns Fair is a very subjective word, I believe the structure is based on your relationship to the lending partner. Is the non-lending partner doing any physical work or simply contracting the work out and handling getting everything done? While you could structure it any way you and your partner agree to, splitting profits 50/50 after you pay the lending partner back their capital is one possibility. 

e.g. Purchase price 50K, Rehab Costs 30K, ARV Sales Price 150K (not counting fees for simplicity);
150K Sales Price (total) - 80K (lending partner's total money in the deal) = 70K Remaining / Divided by 2 = 35K Each Profit Split Equally

More simply; Lending Partner receives 115K, Non-Lending Partner receives 35K

If you were doing the physical labor, adjust accordingly. This could be high or low depending on others' thoughts so please see what other members on here think. Based on your relationship to the lender, would they expect more or less? If my math is correct (please someone correct me in case I missed it!), the lending partner receives over 43% return on their money on this deal which is a fantastic return IMO. You might ask what percent they were expecting on their money and adjust from there. I'd love to know how you end up structuring the deal.

@Caitlin B. Great job on what you guys have accomplished so far! How many contractors have you reached out to in terms of developing relationships? I'm unsure of the population density of your area so perhaps there are fewer contractors than in other areas. This could allow you to gauge how many contractors are actually available if you need work done. I wouldn't rule this out as buying off-market (if that's your plan) will potentially provide more equity.

Additionally, paying market prices on a turnkey property can work depending on what the rental returns are. On the alternative, can you sustain cash flow or at least break even in an unexpected market downturn?

@Dante Fortson Congrats on the purchase! That's a big piece of property, at least by New Jersey standards. What are the local zoning requirements for an endeavor like this? I would scour the zoning codebook, usually available online for free, and see what the allowances are in what you can do, build, etc. What is your plan in terms of setting it up and laying it out? It sounds like a great opportunity and would love to see how it goes in the future.

@David Lundy Welcome to BP! Since you mentioned construction loan, are you looking to build a home or is there a pre-existing one already built? It sounds like you are looking at a rehab loan if it is the latter. Regardless of whether you pay cash or finance, you can still make money as long as your numbers work out. Have you done the market research to see what the after repair value is based on recent comps? If so, does the property look favorable? Feel free to reach out with any questions.

@Brandi Austin Welcome to BP! It doesn't really matter what podcasts you listen to as you'll absorb information from each. I would recommend checking out the Bookstore to obtain a book or two on getting started. There are also BP videos on Youtube about getting started in real estate investing. Episode 300 appears to be a good one on getting started but I know there are many more! If you need help, feel free to reach out.

BP Episode 300