All Forum Posts by: Arron Paulino

 That's what I noticed. The better the credit score the better the terms. The good news is that I am really religious with my credit score so I've done my best to keep it high.

I see that the more active you are in that lender's business the more likely they'd like to keep your business.

I am always open to connecting with potential lenders to grow my network and hopefully, we can get a deal going together.

 I really like what you are saying. I think right now I'd like to try out fixing and flipping to generate some side income as I have just been doing BRRRRs at the moment. I'd be interested in learning more about what you have to offer.

I don't plan on investing in CA and rather do out-of-state. 

 Hey Alex! That's what I figured. I plan to do flips and/or refinanced BRRRRs as that is my primary strategy. I don't really prefer the turnkey approach as I like to go through the motions of getting distressed and fixing it up with the option to either keep it as a rental or flip for a profit.

 What would you categorize as 30% down? I know lenders all have a minimum number as a standard from people I've talked to.

 Thanks for the reply. I agree I don't plan to overleverage myself. I am currently doing the long-term play of when I see a deal I'll commit to funding. If you were in my shoes as a small real estate investor starting out, would you do the same as in purchasing 1-2 projects at a time then once complete do it again?

 That makes total sense. I am working on finding more deals. I've noticed that I still have to be able to pay the fees to borrow as I get more loans from hard money lenders which factors into the scalability. 

I have now been investing in real estate since the pandemic in mid-2020 and have gotten the hang of analyzing deals as well as actually adding SFRs from Memphis, TN to my portfolio. I've kept my first rental since that time and it's been good so far. It had plumbing issues which cost me but I've held onto it since it had good rental numbers.

I've had a second property that started off good but got fire-damaged so I had to sell it off after insurance paid off my mortgage and recoup a little of the investment.

I've continued to add to my portfolio and I now have 6 SFRs currently rented out working on my 7th SFR BRRRR and also my first fix and flip. The return on investment has started to decrease due to the higher interest rates after the pandemic and it's taught me a lot of patience.

My first fix and flip has been quite a learning experience. I have been screwed by a supposed "lender" who ended up scamming me a few thousand and a contractor that hasn't completed his end of the deal. I do not really want to put it back onto the market as I would only get what I paid for it and ultimately lose the money I paid the contractor for this project. It has been frustrating to do this but I see this as a learning experience on what to expect and not do for future deals. 

I am trying to find out if I need to sell off any properties or just keep doing what I am doing. I am looking for private lenders on my own time as hard money lenders are good for the short term but the cost to borrow from them eats into the potential profit. I do want to keep my current rentals so I can build my passive income on the side and strive to be like other investors doing well with a decent amount of rental properties under their belt. Eventually, I'd like to dive into multifamily and gain experience there.

I did start off being a private lender myself but wanted to get my feet wet with BRRRRs of my own attaining passive income on the side of my W2. It really was great being paid monthly or waiting until the end of the project to get paid out. I could go this route again once I complete my fix and flip and rental project. My goal is to match my current W2 even double or triple it so that I can just enjoy work without having to think of the financials of it.

I appreciate everyone taking the time to read this and share any tips on what I should do moving forward!

 He is almost two months behind now from when we agreed to have this on the market. He has been communicative with my texts but keeps coming up with an excuse for why he hasn't completed his end of the deal. I have tried calling but it leads to voicemail. He seems to be living like this isn't a big deal.

I know there are great contractors out there I just wish it was this one. I've asked my selling agent who he referred me to and she's been on top of her stuff. She is even shocked it has come to this. I do not believe I've been put on the back burner as he always asks me for work. I finally came up with a project and he isn't able to pull his weight.

I don't really know the next steps from here. I want to finish this project as it would give me the confidence boost of doing my first fix and flip but don't want to put more financial burden on myself even though it might work out to a wash if I do push through with this project.

 My numbers going into the property:

- Purchase Price = $45,000

- Rehab = $45,000 (the contractor did work and I'm going to assume a quarter of this was actually utilized for the project)

- Estimated Selling Price/ARV = $145,000

I reached out to other contractors to get this project at least cleanup/sellable condition which would be $25-35k. The estimated value that my selling agent was able to find without this property having utilities working is $49k at the highest. The liability part is what one contractor stated when I was doing my search for a new contractor to finish the work. How do I get lien releases from the contractor? It has been over a month since he last did work. I've had this property for about four months now.

I actually did try to reason with my original contractor to which he keeps replying with reassurance and excuses for why he wasn't able to get back to me right away (sick, weather, time off, etc.). He's been really weird as he asked me for an advance before starting this project which I denied as I wouldn't want to pay someone for work they haven't even completed and I didn't have a project at the time. I will definitely be very tight with my money going forward.

I did have other contractors go into the property and show them the scope of work that was put into place by the original contractor so they have an idea of what to expect.

Would this work for an out-of-state property? TN is where this investment fix and flip is located. I do agree things are getting out of hand in CA and really hoping for better times.

 Thanks for the reply. Yes, it's been difficult to deal with even though I had thought we built rapport with each other.

After having my selling agent visit the property to do a checkup, it looks like it has been halfway completed. The interior had progress but the exterior was starting to progress however not quite. It seems like they had good intentions in the beginning but started to slack and get the funds without completing his work.

I have talked to my agent and I wouldn't be the only one involved in this fraudulent activity from this contractor. He is in TN so I am not familiar with suing someone and do not really know the procedure.

I really tried to persuade him to finish his work as he's been good in the past but it sounds like he really took advantage of me. I don't know of any other projects he is working on. I know he was let go from his previous company so I should have seen that as a red flag right away.

Apparently, he is still going about his life like nothing wrong is happening which is odd and really seems arrogant. I have texts and emails saying that he was supposedly following through with his work but he would never back it up with visual proof and just word of mouth.

I am looking to see how to recoup my money to pay someone else to finish the work rather than just take a huge financial loss by selling off the property for what I paid for it and losing out on the rehab funds I had put into this project. Definitely a learning lesson.