All Forum Posts by: Alexander Wardell

As a new investor the topic of property management comes up often during property evaluations.

This is one of those things that will eventually happen once someone reaches a certain amount of properties (unless they want to self-manage 10+ units), but that doesn’t appeal to me.

My debate I am having with myself is should I consider managing my first property or two so I can gain the experience (Been there done that, got the t-shirt kind of deal) or should I put my faith into a management company from day one, freeing my time up for other opportunities?

This isn’t necessary a money issue, as I am fully aware of the benefits a good management company can offer, but its more so the experience side of things.

If I get a great deal and manage it myself for <1 year and hire a company after would that be a reasonable option, or should I just consider it an experience not worth taking?

I would like to hear about other experiences and opinions.

Thanks! 

@ Thanks for your reply! Yes, I do know a contractor, but I would also consider paying other local contractors a few bucks for their time worth it. I like that 5% of the ARV you mentioned. It makes sense for most properties. Obviously, there are properties that will need more work, and this is only if I can get a professional to look at the property. It's true what everyone says, getting the first deal is scary! I just need to jump in with both feet!

@ I did not know there are any restrictions against assigning contracts. If doing an assignment contract isn’t an option are there any issues with trying to do a double close? As of right now I do not want to jump right into fix n flips that is why wholesaling is so attractive because I can do the leg work, find the off-market properties and negotiate with the owner directly. That was main reason I asked about repair cost since I will have to calculate that into the numbers since I was planning on assigning the contract to an actual fix n flip buyer.

So basically, you are saying its illegal for an unlicensed newbie like myself to try contract wholesaling?  

Newbie on Cape Cod, Massachusetts interested in Bourne, New Bedford, Fall River, all of cape cod and Plymouth.

I have been curious about calculating cost of repairs while looking at wholesale deals. Does anyone have pointers on how to get in the ballpark without having a contractor on site. I have been playing around with the PB calculators and find myself throwing numbers like 50k or 60k worth of repairs on house but in reality, I may be 20k plus or minus since I have no real knowledge on the subject.

If there are there any active wholesalers in those areas who could shed some light on this topic I would greatly apricate it!

Should I just link up with a solid contractor who can see the houses with me or is that not needed?

Thanks!

Hello @Drew Greene!

I am also new to real estate investing but will say that this forum and BP in general is a wealth of knowledge.  Other than the podcast, books, and unlimited YouTube videos I would also suggest attending local BP meet ups.  I recommend the Boston Real Estate Guild in Somerville. Well worth the $10.  I got out of the Marines in 2013 and spent years stuck in the rat race and I am also taking the leap into the path toward financial freedom. 

Good luck! 

Hello everyone,

I am looking for a real estate agent who is familiar with the New Bedford MA area. I am interested in looking at multi family homes 2-4 units that need moderate work. I am new to real estate investing but from what I have researched and heard from others in the business NB has some potential. I would love the opportunity to see what is on the market for myself.

Thanks for your time.

Welcome to BP Alex,

Good luck down there in FL! I am also new to the real estate investing market. it is good to see other Marines using the benefits they deserve! I don't think I will be moving down to FL from the Cape any time soon but I am curious to see how it all works out for you. I did try to use the VA home loan while looking at homes back in 2014 and they are extremely picky about any issues with the house (broken lattice) so you have been limited to a turn-key property. Not sure how long you plan on house hacking but I am sure the reward will out weight the cost.

Again good luck and welcome! 

Chris,

Thanks for commenting! That seems to be the route all my research is taking me. Although my end goal is building a strong rental property portfolio I will need to provide banks with verifiable income. Seems like forming an LLC, do some short-term flips like you mentioned with private money, pay myself and build my income will be my path.

This may be a ridiculous question, but I pay myself a salary from my own LLC that would be considered W2 income? I guess it wouldn't hurt to speak with the local banks to see what they require in that specific scenario.

Charlie, 

Thank you for the info! I will look into landlord tenant laws and start my funding venture. 97% of the asking price is high but then again if I can get a good MFR the rents will more than cover the monthly expenses, at least from what I have seen on the rental market.

Mike,

Thank you for reaching out! I am not narrowing my area interest to Barnstable County for my first investment property, that just happens to be where the house that I own is located. I am willing to look at other areas of MA that will hopefully produce that cash flow from a multifamily, which will obviously depend on the area and rental rates. I know I should focus on getting the first deal and original finances (private, hard money etc..) but I cannot help but wonder what will happen once I try to refi out of that financing after the first 12 months. I am trying to be a little proactive on that front.

Since I will no longer have a W2 job when this happens, any bank I try to refi will hold both properties toward the requirements. The money I receive from school and the new property will more than cover the expenses for both mortgages, but no banks consider my VA housing allowance as income, so I will remain unbankable.

My question is there anything I can do now that will hopefully separate the two properties when I try to refi? I know starting an LLC is a good idea but the 8-10 months of rental income for the newly started LLC may not be enough to get a mortgage loan through the LLC alone without the bank looking at my personal finances, which will then uncover the 1,700 a month mortgage and not enough verifiable income to cover both.

I may be completely off on this approach. If I should just focus on getting into a deal and then worrying about step 25 once the time comes please don't think you are being negative. I appreciate any advice!

My brief strategy would be to work with a previous colleague who has been in the real estate business a while, produce a multifamily property around 200k that will need no more than 25k in repairs (hopefully), then put all the numbers together using the BP calculators and any information I can get my hands on. Ask around my inner circle for potential private money investors and even throw in some of my own cash if necessary. Get the funding and buy the property. Rehab will be done by myself, since I am handy and going through a contractor who I have known for a while or maybe a referral from him. Then find a tenant(s) through the same realtor. If the numbers are on point, it will cash flow. Then refi ASAP.    

Again, thanks for your time!