All Forum Posts by: David Begley

@Mark Douglas I'm somewhat in the same quandary right now myself. I've been rehabbing homes for resale to build up the capital to start accumulating and building a rental portfolio. Even though I'm doing REI full-time, I'm leaning more towards finding a property management person/firm even for the 3-4 properties I'm presently trying to close on to rehab-to-rent. For me, it isn't a function of how many doors should one own before it makes sense economically to hire a professional, even though that is how this question is almost always answered and addressed in these forums. My business plan & strategy is to buy C/D properties in the "path of progress", rehab up to rental grade for the area, and keep renters in those properties for the 2-5 years the property values appreciate and then renovate those properties again for resell after they've doubled or tripled in value. Even after acquiring and rehabbing the first one, I will find a property manager even for that one because my investment play isn't cashflow (although all will cashflow even with 7.5% - 10% property management fees), it is to build equity through appreciation. If all goes according to plan (and when does that ever happen? lol), I will be able to resell all in a few years and do a 1031 exchange to defer capital gains and purchase an apartment building somewhere near the beach. (Now if my strategy was buying A/B properties, and cashflow was my primary objective, I would indeed manage those properties myself until it became unmanageable for me. The type of tenant, however, in a C/D property is a different animal than those renting A/B properties... so I've been told.)

So, a long-winded response to say the number of units or doors should not be your only consideration in determining to self-manage or not.

Good luck!

I'm personally glad Georgia requires a Contractor license to pull permits, as well as licensed contractors to pull electrical, plumbing, HVAC, etc permits.  Georgia used to be like Texas where any yahoo could claim to be a Contractor and rip off consumers with their slick marketing and shoddy work.  If the property is yours and you plan to occupy the home for a year or more, that's different; however, it helps consumers (and rehabbers) when the licensing requirements weed out most of the crooks for you.  Yes, it is a royal pain in the posterior to navigate through Atlanta's permitting bureaucracy, but on the other hand, would you want to purchase a home where the work was done by part-time do-it-yourselfers that aren't familiar with code requirements and haven't the wherewithal to back their work product? No thanks.  

@John Ma  This type of situation is exactly why I avoid buying from a Wholesaler that doesn't have the wherewithal to close/purchase the first transaction and misleads and oftentimes downright lies to the Seller.  As another person already stated, if the Seller is surprised, and especially if he/she is pissed at the closing table, you've not done your job very well.  Full and complete disclosure is always the best advice.  If I was the end buyer in this situation and you've collected a non-refundable deposit from me and/or expected me to pay both sets of closing costs, the shotgun would've been the least of your worries! 

 I received a similar voicemail.  I suggest Andy Luick disclose his side of the story here to see if his story is consistent and plausible.  Moreover, if he isn't willing to contradict and prove the allegations discussed, ad nauseum, on these forums are false; and that the Avon deal he spearheaded and sponsored on Groundfloor wasn't a fraudulent transaction, then BP should take measures to keep him and others preying on newbies off this board. 

Can any Atlanta area rehabbers or GCs recommend a good licensed electrical contractor?  One that doesn't work another full time day job and can only work you in on nights and weekends?  Also, the licensed contractor should be knowledgeable about Atlanta City permitting and inspection nuances and capable of navigating through that bureaucracy.  I'm having a hard time finding quality contractors and have 2-3 jobs in queue for entire house re-wiring.  

 Best of luck!  I've recently purchased two properties in the West End but haven't started rehabbing them yet.   I'm looking for more properties in select blocks or neighborhoods in the West End - Pittsburgh, Oakland City, and Adair Park if not yet overpriced. I'm planning to rehab-to-rent rather than flip on these properties.   I'll be interested to watch your progress. 

 @Jay Hinrichs @J Scott First I want to apologize to @Toyin Dawodu if this diversion is hijacking the original post & question. I understand completely what you're asking regarding putting your own "skin in the game" and have found that those lenders not requiring the borrower to commit some cash to the deal will have other [to me] more onerous requirements to offset what they may perceive to be too high a LTV ratio.

Natasha, you may want to try lendinghome and/or limacapital.  You'll have to pay the nominal $199 application fee with lendinghome, but I've found their points, interest rate and doc requirements to be superior to most HMLs.  (I'm not sure I can mention the two lenders in a Forum post, but I have absolutely no affiliation with either.)

I would first recommend to you or anyone that doesn't yet have a track record to try and find another investor friend or acquaintance that does Private Lending using their self-directed IRA or Solo 401k. I connected with someone that funds most all my deals at 1 point & 9% interest for a 9 to 12 month terms. Although most private lenders have finite funds to lend, at least you could build up a resume of successful projects to take to another lender, HML or otherwise, and negotiate better terms.

This is true Ryan. I don't think my situation is unique. I left my W-2 job almost 2 years ago and am doing REI full time. I'm in that unenviable place (purgatory!) where I don't have a W-2 and don't yet have 2 years tax returns as a self-employed real estate investor. I even approached my private banker at the large commercial bank I've had accounts for years and offered to pledge sufficient securities collateral in a close to 7-figure investment acct (not IRA or 401k) for a working real estate line of credit, primarily secured by a blanket lien on real estate assets being acquired, with the securities collateral secondary. It didn't fit in their cookie cooker formula, and I was encouraged to wait until I had 2 years tax returns and not apply then and get a certain denial. Crazy...., and so HMLs and Private Lenders do fill a needed niche, but there are many good ones that know how to lend without replicating the banks underwriting and documentation process.

 Mr. Luick, is the access to pretty interesting loans include funding deals on crowdfunding sites?  What is the status of the two loans you presently have with Groundfloor?  It was my understanding that those two loans may be in default, but if not, please provide updates on both. 

I think most of us here are not on the same playing field as J or Jay... and would give anything to have access to commercial bank credit with no points and 4-5% interest rates; however, most of us aren't and hence the need for HMLs. If you want to borrow at these awesome terms & rates, you should expect to provide tax returns, personal guarantys, W-2s, along with the rest of the proctology exam required by federally regulated and insured banks; however, if you are going to a HML or shylock, you know up front you will have to pay exorbitant fees and rates but the trade-off is to avoid the rectal exam. HMLs that want the best of both worlds should be avoided at all cost. It's not required, nor needed and there are plenty of good HMLs that know the difference.