New to the site and also asking general questions

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New to the site and also asking general questions

Darvin Florian
Cleveland, OH · Member since 2018 · 1 post · 1 vote
Greetings, I first want to stay how much of a good online community this site is honestly! Really good information for rookies. I am new into the real state market and have had a partnership opportunity to start a house flipping bussiness. As of now I have a solid network of laborers each with their own specialty of trades at really good prices, my partner, has been a contractor for over 30 years himself and managed many flipping properties and has a good understand about the industry. We will operate in the northeast Ohio region. I am only 21, but I have seen what real state have done for many and how many opportunities are there in this industry. Like I said, I am completely new to this industry and only have a general understanding. I have many questions so I apologize in advance if I ask any dumb ones, here they are. 1. Is recommended registering the business as an LLC? 2. Based from my research, northeast Ohio is a great area for this type of business with many opportunities in great areas, but I’ve also heard that the market is flooded. Can you still thrive in a market that’s flooded? 3. Investing and funding: how hard is getting price money lenders? My partner has a strong portfolio, will that help with investors see our value? And also how difficult is to get investors? Also, what are some other ways to get funded? 4. How can you tell the difference between a good and bad deal? I know that big factor is location, but also, is it recommended to have the opinion of a real state agent to see if the deal is worth it? Or what the potential revenue could be? 5. If investors are not available, is it good good to take a hard money loan? 6, why is that you cannot get a traditional mortgage loan for a flip? 7. How has real state changed your life? 8. What are the pros of this business? 9. What are some good tactics or bussiness strategy that you may recommend? 10. Is group investing common? For example, if the proposed project estimation total is 90K, can a group of investors invest 30K each, each gaining their fixed interest on it based on their contribution? ( or can it even be possible with more investors like 8 or so) As for now that is all I have, if there is any advice that you Would like to add please feel free to give it!
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  • Account Closed
    New to Real Estate · Teaneck, NJ · Member since 2018 · 167 posts · 60 votes
    8y

    I can help you by answering some of your questions. Good Luck with your new venture! 

    @Darvin Florian-1. Yes you should register the business as an LLC. 2. As a hard money lender we want our clients to close under an LLC. Also is it hard to get a hard money loan not really. We really look to see if the deal makes sense. We look at the property and what you want to do with it. We also look at the individuals in the LLC. We dont charge points in our deals. If you have any other hard money question please feel free to reach out.

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  • James Wise
    Real Estate Broker · Cleveland Dayton Cincinnati Toledo Columbus & Akron, OH · Member since 2013 · 31k+ posts · 20k+ votes
    8y

    @Darvin Florian Welcome aboard Darvin. Some of your questions were very braud and would require a much more in depth explanation or even a book to answer. Many books have been written answering some of them. Here are the answers to some of your questions that could be knocked out in a forum post.

    Is recommended registering the business as an LLC? 

    Yes. Because the two of you are starting a partnership. You need to lay out who owns what, who pays for what, who is responsible for what, what profit your each entitled too and many many more things. If you were alone i'd say not to big of a deal but right now your business needs an operating agreement and LLC structure.

    Based from my research, northeast Ohio is a great area for this type of business with many opportunities in great areas, but I’ve also heard that the market is flooded. Can you still thrive in a market that’s flooded?

    This is where you have your contacts. Your competitive advantage is your network of subs and your partners experience in this market as a G.C. Going to any other market will cause you to loose your entire edge.

    If investors are not available, is it good good to take a hard money loan? 

    Depends. At this moment in time in our market i'd say probably not. As you've already mentioned the market is tight. You need to figure out ways to create an advantage over your competition. Having enough cash to Avoid high interest lenders is a MAJOR advantage. If you do not have enough saved up to do that I recommend getting a 2nd or 3rd job to build up your war chest. Going out there with no competitive advantage is never a good idea.

    Why is that you cannot get a traditional mortgage loan for a flip?

    Lenders want the house to be in livable condition. Most of the time you create profit in a flip by buying a highly distressed asset & adding value by making it livable.

    How has real state changed your life? 

    When I started investing in this business at 21 I was managing a Radio shack making $30,000/year. Today at 30 I run a $50M+ portfolio with over 60 employees & thousands of tenants....This business has been very good to me.

    What are some good tactics or business strategy that you may recommend? 

    Market harder than everyone else at all time.

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