All Forum Posts by: Dan Beaulieu

That’s too much cash to tie up from the get go, unless you are buying at a big discount and can cash out refi in 6 months. 

 I’d skip it until you are comfortable with Brrrr. Otherwise how long will it be before you will be able to buy more?  

A few hundred in cash flow won’t make you wealthy, but big equity gains through buying right and renovating certainly will. Cash flow is just there to make sure you’re safe in the deal. 

Just my two cents...starting out I also tied up way too much cash and immediately got stuck. 

@Jessica Lombardo I do a lot of BRRRR deals In Chattanooga and I'm pretty well Connected to that market, since I invest there personally but it's also one of our main brrrr / fix/flip lending markets. I'd be happy to connect!

Awesome! Could you please DM me your email? 

Hey Vermont Investors! This Thursday 12/10/2020 We will be hosting a virtual happy hour for anybody that is interested in networking with other like minded people. Everybody will have the chance to talk about their business and discuss their goals, bottlenecks in their business, and what they are looking for moving forward. It will be a great opportunity to meet some of the local players that are active in the investment game. Cheers! 

Is there an opportunity to not put 25% down? That is a lot and sounds like you could be tied up for a while? Why not find something to BRRRR and get that cash on cash closer to 30% - inf?

Dude you are young and not married. That screams HOUSE HACK. Get a 2-4 unit or SFR with efficiency apartment, financed with an 3.5% down 30 yr fixed FHA loan. Live there for a couple years and continue to SAVE while your living expenses are paid for. Make sure you've paid off all personal debt, and are maxing out a Roth IRA and also taking advantage of any company match in a 401K.

THEN, we can talk OOS rentals and BRRRR. I see turn key being tossed around on this thread, that is a terrible idea. Avoid turn key companies. They ignore the most fundamental rule of real estate investing: "You make money when you buy."

Get yourself a reliable property manager who has their own turn crews, a local hard money lender who knows the areas and the game, and get connected to local wholesalers. That's all you really need. 

I've bought 16 properties out of state, most sight unseen. At first it went horribly, but then it got really easy once I had the right property manager. You really just need to have a good team. 

P.S. Don't invest in cheap neighborhoods in Memphis. That is also how I started out, and those were always my least cash flowing (highest cash flowing on paper...) and PITA properties. Check out Chattanooga and Knoxville instead. When you're ready of course. 

Here are some great reads for you starting out: 

1. Set for life

2. Long distance real estate investing

3. BRRRR

@Tim Ivory ok my good man. Since I'm a Tennessee based HML, private lender, and rehabber, and also borrow HML and private money on my own projects, and do a lot of JVs, I believe I am well poised to answer this one.

1. You will not be able to qualify for a hml without cash reserves. So your partner would have to be the loan guarantor.

2. If you have the deal and they are getting the loan and providing funds, they are taking all of the risk. For that, a fair split would be giving them 65% of the equity.

3. Create a new LLC for this deal only with you and the partner as members. Outline the terms of the equity split on your operating agreement.

4. LLC name should be the buyer name on the contract. Now your partner applies for the hml, and closes the deal.

5. You do the work, sell the property, wire proceeds at closing, and dissolve the LLC.

That’s it. It’s really not too complicated. This is the right way to do it if you can’t qualify for a hard money loan, and don’t have a PL that will

Lend you 100%. Hard money lenders won’t allow second mortgages, so debt partnerships are out. But if you did have a PL that would lend you 100%, just do a promissory note for 12-15% interest only for 1 year, so that they have the security of a first position lien.

I hope this is helpful! Feel free to PM me if you have any other questions.

@Joshua Lira good hard money lenders will

Finance 100% of the renovation costs.

When I'm doing my own projects with private money, I have them do a loan for the purchase price plus the entire renovation cost up front, to make things easier. For them, their LTV might be too high from the get go funding this way, and I always explain that to them which makes them even more comfortable lending to me. I also explain that if they wish, they could

Fund the rehab into an escrow account at the title company and release in draws like a normal construction loan, so their LTV stays below 70%.

Most of my PL just go for funding the entire Reno up front since it’s so Much easier from an admin standpoint.

@Jessica James I think this is going well...lol. I really like your responses To the haters. As long as you are transparent with the seller, and do business with integrity, you will last in the game.

Sounds like you may have found a cash buyer after all? If not, I have a couple of tips for you:

1. There are probably a few cash buyer / investor Facebook groups in your area. Post the numbers, pics, and address. If it’s under contract you can post the address. If you weren’t willing to post the address originally that could have contributed to why you heard crickets.

2. Contact local hard money lenders and ask if they have any pre approved buyer clients looking for their next deal (I love when wholesalers call me with that).

3. Search for Zillow recently sold comps nearby and look at the pictures, and see which ones have fresh remodels. If it was bought and sold within a year and renovated, those are your flippers. Search tax records for the name, skip trace with whitepages, and call them.

I hope that is helpful!

@Ratan Khatri that is a pretty interesting way to look at expenses. I suppose my entire life is free then since my clients pay for it???

I see your point though. Every time I want a new toy or a liability, my agreement with my wife is that I just have to do another deal that pays for it and allocate those funds appropriately.

I think what you’re trying to get at is things feel free when the money is made from investing and cash flow / capital gains, rather than time that you traded for money. It does certainly feel that way sometimes, but in the end, money is money and should be appreciated no matter the source.