All Forum Posts by: Dan Beaulieu

What @Michael Kinsella said. If you can't even get them on the phone to answer some basic questions, that is an immediate red flag. Imagine how fun it would be to close a loan with them with all of the back and forth that takes place! 

Cash reserves are going to be the #1 qualifier. Lenders see other open debt as increased risk usually. 

First of all, congrats on having the right Girlfriend. Marry her immediately. Having the right spouse onboard is an amazing partnership that will take you very far in life. 

Secondly, you'd never run cash flow numbers with hard money. Hard money is only for purchasing great deals quickly, and rehabbing properties to sell or refinance out. Sounds like you are bankable for a conventional loan on the refinance, so why not BRRRR? I think somebody mentioned BRRRR is risky, but to me, risk is having less money in the future than you would otherwise have if you put 20% down and grew very very slowly that way. THAT is the risk. Also, when people say BRRRR is risky, they have probably never done one before. I've personally done 18 of them, never had any issue.

Pro Tip: Get a property manager with in house turn crews to do the rehab for you (should be a light cosmetic rehab) and then manage it for you and you shouldn't have annoying contractor issues. There are plenty of good PMs doing this. 

This is going to be the best strategy for you with 25K in reserves. You'll qualify for hard money if you can find a great deal and a good HM lender willing to fund up to 100% of the deal. They Exist. 

I recommend doing 2 things: 

1. Read David Greene's book on BRRRR

2. Keep saving while you do everything possible to find a great deal you can buy for less than 75% of ARV all in. 70% is best though.

Good Luck!

@John Morgan

Lots of red flags here. Generally when people partner with a contractor, the deals go south about 50% of the time. Contractors can Jack up costs and make money that way, then there isn’t as much profit left to split.

Also, since you both have different tax situations, taxes would not be taken into account when factoring the profit split. You’d just have to set aside 24% from your share of profits.

Beware any hml with no reviews or references...

Dude that is sick! 

@Anthony Brancato Don't send emails to your contractors. They communicate better over the phone. Once you have a property under contract, if you haven't worked with them before, give them a call and say you have a property and would like a bid, and are willing to compensate them $100 for their time since you haven't worked with them before and you realize that time is money. That will get their attention. 

If you really need good numbers on the rehab cost before you tie up a property because you are unsure, you can contact a local experienced rehabber to come take a look with you and pay them a consulting fee for their time. Local networking events, local REIA, and Bigger Pockets would be the best way to find great people like this. Good Luck!

@Michael Glist there are any hard money lenders out there that can do 75% of ARV and 100% of cost to somebody with 0 experience, with super easy underwriting criteria and no up front fees.

Gee, I wonder who that could be? ;)

@Max Katelouzos we have found that experience doesn’t matter at all. We lend to first timers and very experienced flippers with hundreds of deals under their belt. In fact, the only deal that went south out of 100s of successful Chattanooga loans was with a client that had done hundreds of deals.

Main factor of if you will be successful: cash reserves.

The big national lenders have lower rates but are slow to close...at that point you might as well just get local bank financing.

In your market you’ll Find a lender willing to do 100% of purchase and 100% of rehab for a first timer, as long as you have a good deal

And adequate cash. That’s what it’s all about.

@Kwambe Smith We are chugging along with our Chattanooga BRRRRs and have had absolutely no trouble finding quality tenants this year and have 100% rent collected in 2020 Across 16 properties. Most of my clients are having no trouble either. The area you're looking at though will cause you some serious headaches. Beware properties that look amazing on paper but are in high crime areas...they will not even come CLOSE to what it is on paper. My first few rentals were in these areas. I still have them but definitely wouldn't recommend buying more!