All Forum Posts by: Andrew Postell

@Diana Serban real estate works a little differently in Canada than it does in the US. If you are looking for someone to mirror/follow then connect with some local real estate investors in your market.  The 3 best resources for connecting locally are Meetup.com, Eventbrite.com, and Facebook.  There is a Bigger Pockets marketplace where some real estate investor groups will post but it's seems to be getting rarer these days.  So, look for some local groups using the other 3 resources above and see if you can meet some locals there.  Thanks!

@David Fals Ok, I know what you meant here.  Formally, this is the "expense ratio" that we use.  Reserves is an actual defined item in investing - it's the amount of money you have set aside to cover those expenses, including mortgage payments and vacancies, incase something happens.  So, for reserves, the same rule of thumb is used that any financial planner would tell you - save 3-6 months of your bills.  This will be an important number because some of your loans will also require "reserves" and it's just good practice to have money saved for emergencies.

Having said all of that, my expense ratio that I use on all of my residential properties is 18.5%.

@Tony Thomas any time you sell a property, the liens on that property are seen on the title work and cleared (or paid off) before you sell it. If there are any penalties to using your HELOC in that fashion, you would need to check with your lender. Usually, there are not but I obviously can't speak for them here. Just give them a call to verify. Should be ok though.

@Marcus Wright thanks for your post here. Sometimes in a post it doesn't have quite the entire picture so I just want to be clear on a couple of things. Usually, when we say "I closed on a property" that means we have funded it and it's ours. Is that what you mean? Or are you saying you have one under contract? This is important because if you have closed...we can't change your financing. Now, if you haven't closed...this is a unicorn deal. Meaning, your HML should be funding the entire project with nothing out of your own pocket. At least, that's what a normal HML would be doing for us with this type of deal. Not all HML are the same...and you can certainly work with who you wish...but just know, if this math is accurate, then there shouldn't be anything out of your pocket.

Now, with the draws I want you to think about how a normal contractor is paid.  If someone came to you with a $75,000 project and demanded to get paid all $75,000 up front, alarms should be going off.  Do NOT do this ever.  We only pay our contracts AFTER the work gets paid.  Even with draws.  I mean, maybe a 10% amount up front for materials?  But that's it.  Imagine if any your title company told you to pay them before closing...or your lender told you to pay them before you got your loan...or your mechanic told you to pay them BEFORE your car was fixed.   Nobody operates that way.  Treat your contractors the same way.  They don't get paid until AFTER the work is done.  ESPECIALLY on the final draw.  This is for your protection.  

Again, you can work with whomever you want...but what we would normally do here is work with a HML that funds this entire project and pay our contractors after the work is completed.

Hope all of that makes sense and I hope you don't mind me saying this way.  If you meant something else, please let me know.  Certainly here to help.

@Lena Scott thanks for the post here.  

What advice would you be looking for on the private money part?  

And what type of advice are you looking for for the contractors?

If I can take a stab...a lot of people ask "how do I know which contractors are good or not?"  This is a super important question and it doesn't just apply to contractors. How do you know that a title company is any good? An electrician? A lender? Anything? Even if they do have 20 years experience...how do you know really? And while nothing is foolproof the most consistent method of finding good vendors is relying on OTHER real estate investors that have worked with those vendors. This is why we network with other real estate investors - kind of like what you are doing here!

So, let's try some local real estate meetup groups. Meetup.com is a good resource for those but some of the groups will also post here on Bigger Pockets Marketplace too. Even facebook might have some good local groups for you. Some of those facebook groups have thousands of members. The priority is consistent recommendations from active investors. Oh, eventbrite too. But post locally for this. That’s the best bet.

If you have any other items you are looking for information on, please do post.  Certainly here to help. Thanks!

@Joji M. most of us use Finishing Touches.  Especially if you are out of state they are very helpful. They have an online portal that you can log in and see your progress and they keep you posted consistently too.  They are probably the #1 recommended GC in DFW because of their reliability.  Here's the link to their website HERE.  

I live in zip code 76111.  Good rental area.

@Jakub R. as a 15 year, out-of-state investor, my recommendation is to ALWAYS choose whatever city you have the most trustworthy contacts in. That's the best market.  Keep in mind that you may never see your asset. That's an ENOURMOUS amount of trust/money to put into a stranger's hands. What I mean here is that if you know someone in a one city...but that city may not have as good as numbers as this "other" city...then stick with the city where you know people. One wrong move, one wrong contractor, one wrong vendor…will erase any "benefit" one city has over another. Your network is the most important piece for any potential returns when you invest out of state.  When I lived in NYC I couldn't invest there.  I had to invest out of state.  Now, I see your profile says NJ...I would do whatever I could to try to target a town that's within 1 hour of you.  Do everything you can to be local.  You have more control, you can screen your vendors, meet with other investors, etc.  Everything leans to trying everything you can to be local.  And if you cannot, then go with the city where have people you can trust.

Hope all of that makes sense.

@Ryan Keeslar you have some good comments above and I wanted to reinforce this message as well.

This is a super important question and it doesn't just apply to lenders. How do you know that a contractor is any good? An electrician? A title company? Anyone? Even if they do have 20 years experience...how do you know really? Putting costs on a spreadsheet just tells me who's cheap.  That's not the whole picture.  And while nothing is foolproof the most consistent method of finding good vendors (including lenders) is relying on OTHER real estate investors that have worked with those vendors. This is why we network with other real estate investors - kind of like what you are doing here!

So, let's try some local real estate meetup groups. Meetup.com is a good resource for those but some of the groups will also post here on Bigger Pockets Marketplace too. Even facebook might have some good local groups for you. And those you don't have to go meet in person. Some of those facebook groups have thousands of members. Ask on those facebook pages who good lenders/vendors are.  Go to the in person meeting and see who people have been using.  The priority is consistent recommendations from active investors. Oh, eventbrite will also have groups that meet in person. But post locally for this. That’s the best bet.

@Steven Cingano and everyone else in the Syracuse market.  Let's try some local real estate meetup groups. Meetup.com is a good resource for those but some of the groups will also post here on Bigger Pockets Marketplace too. If you want to create your own, I would suggest posted them on both of those platforms but there are already several that exist.  Even facebook will have some good local groups for you. Some of those facebook groups have thousands of members. You can even do the whole "New York Real Estate Investor" search thing since the Facebook is all online.  But several meet in person too.  Oh, eventbrite as well. But use those sites and the BP marketplace. That’s the best bet.

@David Lee Hall, III thanks for the post. I would highly recommend getting on a local level to get this answer. I mean, we use August REI here in Texas...but can they even do PA? Dunno. There website is HERE if you want to check them out.  But again, I would still recommend going local.  So, how do we find some local recommendations?  Several ways.

Let's try some local real estate meetup groups. Meetup.com is a good resource for ones that meet in person but some of the groups will also post here on Bigger Pockets Marketplace too. Even facebook might have some good local groups for you. Those you don't HAVE to meet in person.  Some of those PA facebook groups have tens of thousands of members. The priority is consistent recommendations from active investors. Oh, eventbrite too if you like meeting people in person. But post locally for this. That’s the best bet.