2 deals at the same time...good problem to have?

Question

I have been drinking the Brandon cool-aid and somehow followed the model of jump and then put my parachute on.  In my quest to obtain 3 multi-families this year (1 down 2 to go) and my daily stares at my vision board I now find myself under contract for 2 deals.  1 is a buy and hold multi-family with great COC and cash flow and the other is a flip that I am getting at a good discount.  The buy and hold needs cosmetic work while the flip is a little more extensive as there will be a new bedroom created with an attached bathroom.

I have hard money lined up for one and a traditional loan for the other - my question is do I cut one loose so I can focus my time and money to knock it out or do I partner up with someone who can bring money and time to help with the other?  I have several private lenders lined up which are looking to get in (so that helps with the money, more would be better). So is this a good problem to have and how would you proceed?

T - 27 days to closing.....

Antonio Figueroa · Answer

Just wanted to give an update.  I closed on one property 2 days back and one had to let go as the seller could not provide a clear title.  This BRRR will have minor reno with demo starting this weekend in the bathrooms, electrician taking a look at panels (precautionary step), flooring, trim, spackel and paint Monday.  This will be tenant ready and cash flowing in 3 weeks!!!

Marlen Weber · Answer

It sounds like you'll be busy for the next upcoming months, but if you're up for the challenge, it's a great problem to have. Good luck :)

Antonio Figueroa · Answer

I am in the east coast (NJ) and all meet ups have been difficult at best.  I have working my internal circle, looking in the MeetUP app for local investors.  Next time I need to work on the relationship earlier to have funds ready ahead, so now I have to hustle but again not something I shy from :)

As I respond I am already looking at my 12/31 goal for my 3rd deal under contract this year and cant wait.

Daniel Haberkost · Answer

Sounds like you have the motivation to make it work. I'm not sure what your market is like but here in CO if you have a genuine deal it's easy to find money partners at local RE meetups. Is that an option for you?

Antonio Figueroa · Answer

@Daniel Haberkost Time is not so much an issue, we all have 24 hours a day and I dont mind the hustle.  With my primary job  background 60-80 hour work weeks are not uncommon which actually is why I am pushing for that FI funny enough :)   My concern is the funding and balancing two projects I guess.  I have direction, a big "WHY" and a plan just feeling if others run into this scenario and what they have learned from doing 2 deals at the same time.  I figured out a large slice of the funding question and found a passive investor that wants to work with me.  Looking for another so if there are ideas on how to network that might be helpful also.

Daniel Haberkost · Answer

@Antonio Figueroa Correct me if I'm wrong, but it sounds like you can handle it and they're for sure worth it BUT it's going to consume your life entirely for a couple months? And that's really the issue?

Antonio Figueroa · Answer

@Theresa Harris - That was what I was thinking.  Pushing the flip back so i can get the muli taken care of first.  The flip has been in the works for the last 3 months and only last week did the contract get signed because it was a pre-forclosure deal.  Worst case is my holding costs will go up but the positive note is the flip is not with hard money so those costs will be reduced.

@Daniel Haberkost 100% did my research and these are good deals based on the neighborhoods, rental rates, taxes, comps, appreciation, condition of the properties when I walked them.  I have been laser focused on these areas for a year now so got my finger on the pulse.  I have a FT job already and am doing this to help reach that FI level, step by step filling the bigger holes in my "financial spending bucket".  I have the crew I used for my previous rehab which turned out great with the exception the GM sucked so I picked up with everything.  That was not that bad because I already have that background and  am capable of doing a lot of the work on myself.  This will stretch me thin no doubt about it but at the same time I am not putting every penny in.  The investors that I am working with are all money, no "hands on" experience with renovations.  If I could find one more investor then this becomes easier so I wont have to swing the hammer as much and can focus more on the project management aspect.

Theresa Harris · Answer

You put both in knowing they could both be accepted.  So if you can afford both, then do both.  You could ask to push the closing on the flip back a bit and move up the other to give you time to do the cosmetic work on the long term rental.

Daniel Haberkost · Answer

This is very much dependent on your personal financial situation, network, goals and risk tolerance. If both properties really are good deals then I know what I would do (make it work). But I'm in a position where I can do that. Are you in a strong financial position or would you be spending your last dollar and taking a potentially catastrophic risk?

If you did your due diligence properly and the numbers make sense then I would think the biggest risk would be not being able to manage the deals effectively by yourself. Are your private lenders competent investors or do they just have cash? Can you negotiate a situation with one of them where they take on some of the workload?

Additionally, do you already have reliable contractors who you can put to work immediately? Are your systems/processes in place for a rehab?