All Forum Posts by: Bernard Chouinard

Hi all - So a seller has a house showing up on Auction.com for an in-person auction. The house is not foreclosed on yet. How can Auction.com auction a house that is not bank owned? The seller claims they got no notification either. Is there something they can do to delay?  Any creative ideas for an acquisition here that would also allow them to stay but the owner ship is changed over, would that just be too riskey? 

I'm looking to acquire a three unit building in Massachusetts via owner financing which would require me to do an immediate conventional refi. I'm looking to see if there is a no cash out refi available at 90% LTV.

I bought into fund and grow which allows for a 2nd person to sign up as well. If anyone is looking to do this week can split the cost 50/50.  $1900 for your half. Reach out if interested. 

Podio is great, I was using it when I first started certain great for allowing automation and great integrations with 3rd party tools.  The problem I have with Podio is you do have to invest heavily in the initial customizations.  My topic was more around the out of the box all in one tool that covers CRM, list building, owner information etc. 

With the economy doing well prior to COVID-19 the booming market allowed for many new investors to jump in and start making a profit. With that comes more and more investor tools that didn't exist 10 years ago. I find myself looking for a better way to manage my leads, tracking not only the source but what my last step was if it be mailer 1, mailer 2 or even calls. However I find myself a little over whelmed with all the options. I tried Propelio but found the CMA to be lacking, I did bring this to their attention as it would hardly pull recent solds without going crazy with the criteria. I spoke with the team there and pointed out recent sold that were not showing up in their CMA's but with some more search found this to be a common complaint.

I then moved on to PropStream and I have to be honest I didn't give it much to really say much about it.  Propelio, Propstream, RealFlow, REIPRo, Basic Excel, Mojo Dialer, the list goes on for ever.  I would love a TRUE unbiased comparison of these tools to determine the best one to use. 

What are your thoughts?  What is your process of tracking leads and what tools to do you use to better manage? 

 I'm not at risk of losing the deal, yet.  I can get this extended but who knows how long COVID-19 is going to disrupt our lives and who knows where the market will be after we are back "normal" and lots of lost their jobs so certainly want to do everything to not allow this to sit.  

2 Days before closing on my rehab, my private lender pulled the plug on the funding for fear of the uncertainty we're facing with the market and the virus.  He was getting great rates with 2Points origination and 15% interest but no fee's to pull draws. He is the only person I've used on funds so now I have to try to find a legitimate Hard Money Lender hopefully directly so I'm not paying a broker here in Massachusetts. 

With that said, I'm seeing a lot of Hard Money Lenders are backing out of deals, not just my private guy.  Who else is dealing with this and what are you doing to combat it? 

Investment Info:

Single-family residence fix & flip investment.

Purchase price: $89,900
Cash invested: $78,000
Sale price: $242,000

Off-market lead found threw news articles for some trouble the owner was in and learned of his vacant house. After reaching out to him found he owed too much so we worked a short sale that took about 4 months to complete. Once done we jumped in and started the work!

What made you interested in investing in this type of deal?

The original plan was to wholesale but since what was owned was too much we had to shortsale and found a partner that wanted to fund the deal so I jumped in.

How did you find this deal and how did you negotiate it?

We came across a news article about the owner being charged with animal cruelty for killing his dog by tieing him up in the basement and letting him starve to death. This article, it talks about how he walked away from the house so I tracked him down to his parent's house and made an offer on his house. Here is the article: https://www.masslive.com/news/worcester/2018/10/auburn_man_facing_animal_cruel.html

How did you finance this deal?

I found a money partner who lends and wanted to fund this deal.

How did you add value to the deal?

I found the deal as well as managed the project from end to end.

What was the outcome?

There was some delays and added costs, 80% of the electrical was replaced, all mechanicals was replaced, tons of pipes were replaced including broken cast iron pipes. There was a ton of mold issues as well and since the house was well known to the town inspectors they extremely vigilant on the work we were doing causing some delays. However, we pulled through and still made out at the end.

So over the past couple of years, I've slowly processed several wholesale deals, obtained a rental and completed 1 flip. Now I'm starting to ramp things up and have 2 closings at the same time at the end of March. WHOA. I'm going to really make sure I'm on top of everything. I'm extremely excited to get this going as both properties have such great profit potentials. Property 1 ARV $235K, purchase price $87K with $55K in rehab. 2nd property ARV $345K, purchase $225K and $60K in rehab. The private lender I used for my first flip has his funds tied up so now I have to explore HML's. I'd love to hear your experience on HML's you use today.

I'm still a newbie investor and to be honest, I'm not sure at what point I'll consider myself novice enough to not be considered newbie. As of today, the deals I've done are several flips, 1 SFR rental, many wholesale deals, and even some private money lending. I've read (audio) several books listen to hundreds of podcasts, attended many REI events and met some very wonderful people. Today, the one deal I was working where fear got in my way is really what I want to talk about. Now please bear with me, I'm not a writer, hell I know my grammar is horrible but thank god for Grammarly, but one thing I've always been is an entrepreneur. I've ALWAYS found ways to make money which is why I'm in enterprise sales. I love to find ways to make money its a game and I absolutely love it!

Let me just get right to the point of my post.  About a year and a half ago, I had a response to one of my marketing letters.  It was an owner of a 3 unit building, 2 bedrooms each, in the town of Fitchburg Massachusetts.  This is one of those towns that is going very well with rentals but also one of those towns where the valuations of properties can very greatly from one street to another.  This woman reached out to me with a 3 unit building for sale.  Her son was living on the top floor, the 2nd floor was rented by a long term tenant and the first floor was vacant.  It needs some work as each unit needed to be updated, there was some roof damage that needed to be addressed and it had a snowman in the basement, ie asbestos covered furnace.  Now I've seen this in my wholesaling and I personally have never delt with them.  This was not in use but still there with some other pipes covered.  In my research and in speaking to veteran investors I've learned that they would just leave it alone and not do anything with it.  I managed to have the owner agree to a purchase price of $180,000 with owner financing.  The problem I faced was that the town assessors had this building at 9 Bedrooms total (3 Br per unit) when in reality it was a 6 bedroom building (2 each unit).  I let my fear get in my way and was unsure as to how to proceed.  The rental income of 2 bedroom apts in this town didn't go for much and previous sold comps at best were around $190 in much better shape, no work needed to $55K with work needed.  I couldn't pull the trigger, it didn't seem to make sense to me, again the newbie investor and after talking to others, I was convinced to renegotiate to $90K.  Again, similar buildings sold for $55-60K so my thought process was $90K owner financed would be a good deal for her and fair to me.  

Today I decided to check on the property and in August of 2019 I find that property was sold in the same condition for $253,000.  My heart sank.  Did I really just lose out on a $73K profit because I was too afraid to pull the trigger?  I could have simply bought the building with little money of my own then turn around and put it on the market if I didn't want to deal with the updates to make it rentable.  

Lesson learned here.  Don't' let fear drive your decision making.  Run the numbers and if they work, then they work.  I'm certainly kicking myself for this one but there are plenty of other deals out there to be had.  I'm in the middle of 2 flips and ramping my marketing back up to get my wholesaling going with some cherry-picking of my own of course.  Am I a little upset that I allowed this to happen.  Of course, but I've learned from it and I'm moving forward.  I'm only posting this to share my experience.