All Forum Posts by: Brian Butterfield

@Brett Winston

I was in your exact same position almost a year ago and things have really worked out great for me. I've financed every flip with hard money (5 of them since December) and I've found that there are plenty of deals to be made even when factoring in the large expenses of a Hard Money loan. Like many people above have stated you will have to come up with some money down, but building a relationship with the lender and good communication can get you much better rates then you may think.  I went from my first Hard Money loan at 4 points and 12% (80% overall funding on purchase and renovations combined) and now have my lender giving me 1.5 points at 10% (90% overall funding on purchase and renovations combined).  The out of pocket money that you will need to bring to the table can be the one thing holding you back ( I know it was for me) if that's the case then I would suggest you leverage as many close contacts that you can come up with. Family, friends, co-workers, etc... Talk to them about what you are doing and you will be surprised how many have savings that they currently have sitting in some low yield account. You can offer them great interest rates on loaning to you (10-15%) and draft a promissory note and have a lawyer proof it. This is how I went about starting my Investing career and I absolutely suggest it as a great way to get started. Wish you the best of luck!

@Gabriel Ayala

I've financed every flip through hard money and this is a great question. I don't think there is a right or wrong way to go about it. There are positives for taking both approaches in my opinion. If you find a property before you reach out to the lenders you can have a solid presentation to hand over to them and will come across as professional and confident. They will absolutely like that. On the flip side reaching out before you have a property gives you a chance to introduce yourself and build a relationship while you look for your project. Several lenders will even evaluate deals with you before you make an offer. Personally I think it's best to reach out first talk about your game plan and feel out rates and terms. That was how I approached my first flip and I still do several loans with that same lender. As you take on more and more projects lenders will reach out and your network and options will continually grow. I currently work with 3 different lenders and have taken the same approach with all 3. Hope this helps!

100% rehab funding is also common. As long as the total cost of rehab and the loan is under the lenders wanted LTV (70%-80% is the norm that I've found). Even then I have found several lenders that will stretch their numbers to make a project for you.

 I'm sorry but I have to strongly disagree with what you are saying here. I Currently have contractors that turn out quality products and give me solid discount on their rates because I give them repeat business. Prime example is my contractor "David". His company did a total of $125,000 in business last year (his first year in Business) and already this year I have given him 4 projects that total over $150,000. If he is able to consistently have work from me and grow his business along side mine why would he not continue to give me a discounted rate?  He still can take on full priced conventional home owners but lets face it they are only using him for 1-3 projects in a 5+ year timeline, its just good business to continue to work for a little cheaper while having project after project lined up. I'm not new to the contracting world by any means and I apply this same principle in my full time job as a project manager for a large industrial control automation company. We have tons of customers that continue to work with us because of  our quality of work and the fact that we give them a discount on labor rates. Thats what keeps them being repeat customers. I feel that's not an unrealistic thing to ask for in my contractors. 

I appreciate all the feed back!

@J Scott you obviously have been in this business much longer then me and it is reassuring that you view the contractor relationships the same way I do. I strive to keep the same principles with my contractors that you mentioned. My issue is the amount of work that I have is much more then the amount that my select few Solid contractors can handle. Thus the need to reach out and drive in more options. I have plenty of work so for someone to be turned off by me saying I want to give them multiple projects .would make me not want to work with them all the same. Thanks for the insight into the mind of a seasoned investor :)

Contractors seem to be everywhere, but the right contractors to fit my business seem to be elusive. I've Compiled lists and cold called by searching places like homeadvisor or angieslist, as well as go through my networking of contractors that I currently work with, but where I seem to hit a road block is finding the select few contractors that are willing to work with in my business model. Specifically I'm looking for contractors that have a work force that can tackle multiple projects at once, are motivated by repeat business, and will give me solid consistent pricing (in return for the volume of work I give them). The catch is I have access to all my finish materials (flooring, tile, cabinets, counter tops etc..) at cost direct from the manufacturers. This means they don't get to mark up the materiel. I still expect to be charged for all the install labor and any coordination time it takes in delivering materials to the job sight or scheduling between different trades. I've been very successful in the last year running my flips as the General contractor but find that I need to bring on multiple GC's to keep up with the amount of work I've been putting in the pipeline. I don't want to keep running my own projects so I can work more  ON the business and less IN it. Any creative suggestions or advice about how to track down the types of Contractors I'm looking for??

@Jay Hinrichs I apologize for not making it on Tuesday I came down with a nasty bug and just now getting back on my feet. I Definitely would like the chance again in the future to meet up and network with everyone. 

@Jay Hinrichs  sounds good thanks for the invite!

Awesome feedback everyone thank you ! keep it coming :) 

@Chris K.  absolutely agree with you on the Photos! I always have a professional photographer shoot our projects. This was just our solution to getting a quality look inside for potential buyers during Pre-sale without paying a photographer to come shoot the house 2 separate times. Photos are my favorite a swell ! :) We have had a good amount of success with this so just thought i'd put it out there.

@Bryan C.  my realtor and I had brainstormed the I Idea about 6 months ago and started to implement in the spring time. We shoot the videos from our Iphone's and edit them using the iMovie app that comes with the newest IOS software update for the phone. Its free if you have an Iphone :) and I'm sure if you use android you can download an app that can edit your video aswell!

@William Morin Thanks it really has been working great! 

@Brian 

@Brian Cam This was Specifically a Trailer with the intention for people to contact my realtor for more information and to see some shots of the inside before there was ever any photos on the MLS. The actual video has all the stuff you said ( sqft, beds, bath etc.. ) and we send that as a follow up to the interested parties as well as posting it once it goes live on the MLS. Contact with other agents is where we see the most results and we put the property specs in the email that we send out to them initially. The follow email with the real video keeps us in front of them and allows them to show/share with their clients. Not sure if its the best way to go about it but it sure has been successful so far :)