All Forum Posts by: Adam Scheetz

@Mike D'Arrigo I wouldn't say the Memphis market has high operating cost, certainly not compared to Jersey here. I don't follow your reasoning that An A or B class should necessarily command more rent from a post rehab purchase. The value comes in the stability of the rental not necessarily the sole rent. I could go buy a Duplex in Newark New Jersey that cash flows $500+. That doesn't make that a good investment. High crime, poor tenant pool, crappy schools, unfavorable laws, and ridiculously high taxes. This property I'm looking at is $138k with 20% down at $1250/mth gross rent with $1k in property tax, and the slightly lower percentages for things like CAPX, MX, and vacancy. Given the location, stability, and level of care taken by the rehabbed, it still seems like a beneficial option. I think @Jay Hinrichs and @James Wachob are right on. Our of state investors such as myself are interested in a long term stable asset from a reputable source versus looking at only cash flow. I'm loving all this feedback!!!!

By that logic there are no good wholesalers or flippers because they should just hold the good deals. Are you suggesting that because someone provides oppertunities for other people as a key principal of their business that the opportunity itself is lacking value? I admit there are bad turnkey operations out there, but a good product that cash flows and isn't in negative equity sounds like the goal of most investors. If some takes the hassle of that process and profits from it and leaves enough meat to have a viable deal I'm not sure that constitutes a "loser". @James Wachob What's your take on this topic? 

He buys the properties himself and rehabs them to sell to investors. It's actually kind of smart if you think. Provide a good product, with minimal maintenance costs and manage the properties in order to attract buyers that tend to buy multiple properties from you as their source. They average about $220 per door. He does keep properties for his business but also liquidates certain ones to continue to generate capital. They don't find gems. They find bad properties in great neighborhoods and bring them up to modern standards. 

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*This link comes directly from our calculators, based on information input by the member who posted.

Greetings Again BP Community,

Here's my dilemma. In my valiant quest for a good value add property as a long distance investor, I've learned some stuff. 

• Stuff 1: Putting together a good and reliable team for your first out of state purchase is daunting.
• Stuff 2: Most turn key providers are sucking up every bit of equity in exchange for a break-even property at best that will still likely need some help in the near future because of rehab shortcuts and location. 
• Stuff 3: If I had the team in place and the deal ready, I'd bank all the equity and cash flow but would have to endure the process of getting to that point.

So here's my issue. I have actually found a good, trustworthy, and highly recommended turnkey provider who works with Investors and ARE investors themselves. I communicate directly with head of the outfit which is nice. They cover the property management in house. Only rehab in A & B Class neighborhoods. And have an average tenant vacancy of 3.4% over the last 10 years. The rehab itself is a bit above average but for good reason. They update all the bathrooms, kitchen, plumbing, electrical, and replace the roof. All hard surface floors and counters are installed for ease of maintenance. Their whole goal is to front load the property with all these updates so that the investor can ACTUALLY cash-flow. BTW, this is my review not a regurgitation of some advertisement from them.

So the question is, until I can get a good and reliable team of people in place that can execute the deals for me, Would a low purchase price turn-key property in a Class-A neighborhood that cash flows $150-$200 with lower CAPX, Vacancy, and MX costs really be such a bad idea? At least until I get some more experience and connections.

Anxiously awaiting your thoughts!

-Adam Scheetz

@Drew Hickok It's called 'Value Add'. You're doing the work and therefore reaping the benefits of the value put in. Shoot, I'd love to buy it from you with only 25% of the work remaining and 100% of the benefits. That's a great DEAL! But in the interest of transparency and ethics, I feel you're better off seeing your job through to completion and getting the fruits of your labor. 

Don't sell it. Finish the Job. Take the profit. Gain the experience. Don't let someone swoop in and buy it for pennies on the dollar. If she wants it, make her pay for it appropriately. Tack on 85% worth of the completed value and sell it if you insist. But don't undo your invested equity. 

My $0.02

@Aaron Wade it's taken 5 years for that fund to hit 46%. So he gets 174 shares, waits 5 years, and nets $11,500. Could he not flip 10 houses within that time and make exponentially more coupled with the value of experience and connections he makes.

You make a greater return in less time buying Marijuana Stock.

I say go put a DP on two properties. Partner with two people for an equity spilt to cover the rehab. Refi out after 6 months and pay them back with interest and hold. If you are able to pull your DP out that's even better. +1 for making two partnerships. +1 for making them money. +1 for the experience gained. And +1 now having two buy and hold properties with little money out of pocket.

Just my $0.02

@Jay Hinrichs Could you be anymore of a ROCK STAR!! Great info Jay, Thank You! Do you just show up with a handful of $5k Cashiers Checks?

I'm looking at XOME.com and Auction.com and it got me to thinking, I've got a great prompt for a cool discussion topic!! 

What are some tips and tricks for conducting due diligence on properties going to auction?

As in;

• If the property is occupied, are there is secrets to getting them to let you inside without being intrusive? 
• When going to a live auction, what rules do you set for yourself?
• What are important things to consider if you when the auction and what to expect?
• Are there particular ways to work with a bank before, during, and after an auction?

I know there are some SUPER knowledgeable people out there on REO and Auctions who could crank this thread up to 11 by dropping some wisdom on us!!!!!!

Thanks in Advance!!

Investment Info:

Single-family residence private money loan investment in Bayville.

Purchase price: $88,000
Cash invested: $50,000

Financial Partner on a SFH Fix & Flip in exchange for an equity share upon sale.

What made you interested in investing in this type of deal?

Very Experienced Investor who is well versed in flipping, B&H, and Hard Money lending. He has connections, knowledge, and most importantly and successful record.

How did you find this deal and how did you negotiate it?

Through an Agent I met on Bigger Pockets. Originally it was a $65k investment for a 50/50 split. Most I could do was $50k, so I reduced the equity split proportionally to the amount invested.

How did you finance this deal?

Personal loan through a bank

How did you add value to the deal?

I used all my contacts and networking to find more financial partners for other larger scale deals.

What was the outcome?

I'll let you know in June

@Paul Stewart thanks for the info. I've been avoiding AC for that reason. The market seems flooded with cheap rentals within the city. Speaking of flooded, thanks for the heads up on the flood cert. I know up in Keansburg, the insurance agency i was working with was sure to give me the skinny on FEMA flood mapping for the city areas. I'll be sure to include that in my research. Thanks!