All Forum Posts by: Adam Steinebach

Sage advice.

(bump)

Hans Restuccia

Do most HML's loan on equity based on the home's current condition or is the ARV taken into account?

@David Beard

Fantastic insight. Thank you! I am also including rehab costs and agent fees as well, though I forgot to list them above. Does 5% sound about right for the realtor? Actually, I have over-budgeted for closing costs for that specific reason. I was originally figuring on 3-5k on both sides of the sale for it, but my mentor instructed me that is unlikely on sales of less than 150k or so.

Can anybody tell me a bit more about the appraisal process? I'm sure so much of it is just subjective to the appraiser, but any experiences you all have to share would be very welcomed.

@Karen Margrave

@Hans Restuccia

Anybody have any advice on the topic at hand?

@Will Barnard - I'm currently building a database via excel spreadsheet on rehab numbers. I'm logging average price ranges for assorted materials. My team consists of 3 guys, between the three of us we can basically do anything that the work order will call for. Including licensed electrician and plumbing work. My other two guys have agreed to reinvest 100% of any profits into growing the business.

I'm also developing a formula for what's called maximum allowable purchase price. So far the formula is ARV - profit - interest - closing costs - holding costs = MAPP.

I've also got a self-made survey to carry with me on all visits to potential investment properties. I'll survey the house to help me determine what the rehab costs will be.

As far as exit strategies are concerned, I've really only got one: Budget for holding costs and price that puppy to sell.

Any other suggestions?

So, I'm heading to the local REI meeting in Fort Wayne 10 days from now. I'm going to be looking for investors to help me launch my business. I'm currently working on my business proposal, and I have a list of several possible properties I'd like to get involved with.

Does anyone have any suggestions?

I really appreciate the advice here. Karen Margrave, I don't need a ton of contract help to get started. I do have them, if needed, for any unforeseen issues. But I can do most of the rehabbing myself, and with the help of my partner.

I've made absolutely no bones about the fact that I am a novice to the game. But that's not going to deter me from continuously moving forward. I have a mentor that has dominated the West Michigan market for the past 17 years, and he's a wealth of information to me. So I'm learning more every day.

Alright, so this is my situation:

I have a team of contractors that are ready to roll as soon as possible. I've got a project manager in place (because I can only dedicate part time hours to the actual rehabbing process), and I'm shopping several different properties in the area.

I was really surprised when I started doing some hunting and seeing 30, 40, 50 thousand difference in LP and Tax-assessed value here in Fort Wayne. So, everything is ready to go, now I just have no clue how to pull the trigger.

I don't have much in the way of start up capital. My credit is fair, not great (yet). I'm wondering which would be a more suitable use of my time (hence the name of the topic). Will I be forced to seek private money investors because I won't have a suitable down payment, or are there HML's out there that will lend against ARV with no down payment?

In addition to that, I could really use some guidance on what steps to take next here. I've made so much progress in the last month, but now I'm completely stalemated because I don't know what to do next.

And while I'm at it, do I need to make an offer on a house first, then contact the HML? Or should I get in contact with them in advance? I've heard some say that I need to have the house under contract before seeking lending.

Thanks friends!

-Adam

Nice to meet you Mehran. I'll be sure to follow you. Never know when connections might be useful state wide.