Rookie looking at first investment. Send Help! (lol)

[Ricky Dorn]

Hi BP community, 

My name is Ricky, I am couple months new to the membership. I am reaching out because I think I might have an opportunity and don't want to miss out. I have a lead on a house in San Bernardino County. The house is off market, the seller is asking $290,000 and needs some about $50k-$70k in repairs. The ARV would be around $490k. I haven't finished the BRRRR book yet but I feel like this is a great option to BRRRR.

The only thing is, this is a cash only kind of deal. I'm not sure what I am doing. My guess is that I could do a hard money loan? I also don't have a team of contractors to hire for repairs. 

That being said, if you can help with any advice or help. Please let me know. 

[Canesha Edwards]

@Ricky Dorn

Hey Ricky.

Welcome to BP.

First, build you team of contractors. If your thinking about using hard money, you need to be able to move quickly on renovating properties to avoid additional financial and mental stress of a hard money loan.

I find my contractors a few different ways.

1. Go to Home Depot early in the morning. Like as soon as they open and just hang out. You want to network with the contractors that are there early.

2. Ride around looking for rehabs. Anytime I see someone working on a house I stop, introduce myself as an investor, and start up a conversation. Sometimes you’ll get lucky and they will give you a tour of the property- this lets you see their work product first hand. Always pay attention to the job site. Is there trash everywhere? Or does it look fairly clean?

Now, in terms of the actual deal itself. Find out why the owner is selling. Maybe the owner doesn't want the headache of rehabbing the property, but they maybe be willing to partner. See if they would do a JV deal with you. You and the owner enter into an agreement to where if you front the rehab cost- the both of you can split the profit once the property is sold.

If this isn’t an option- see if you can find a partner to help you tackle the deal if you don’t have the funds to do the deal yourself. If it’s a good deal, you will be able to find a partner.

Hope this helps. Happy Investing.

Canesha