All Forum Posts by: Brad Z.

I have been thinking extensively about this and have laid out my goals.

1. Aggressively grow my buy/hold portfolio (currently at 21 units). I would like to double but it adding anything over 12 units will satisfy my goal. Another key is to do this with long term fixed financing.
2. Rehab to Retail 3 Houses
3. Sell Primary residence and acquire owner occ rehab in area where we want to live long term.

I'm off to a good start. I have an offer on a 4 unit and a rehab to retail under contract! Bring on 2012!

The most efficient way to get solid contractors is through referrals. I would start with your local REIA or just start trying to talk with other investors. I am very clear upfront on what I want. I have also found that paying a little more is not always a bad thing if it gets you a solid crew because it will probably save you $ in the long run. Dont always go with the lowest bid, go with the most reputable.

This is a great thread and very beneficial. I just put a flip under contract yesterday. Keep the thoughts and ideas coming!

In my experiences the small houses (ex 100k-120k resale) have smaller sq ft of counter tops. Call granite guys in your area and ask if they have scrap or reminate pieces that may be enough to do a smaller kitchen. In alot of cases, they will do it cheap just to use up the material and make something on the job.

Add a row of accent tile to your bath tub surrounds. It is typically just a different color of cheap tile (ex use 12 x 12 tan tiles and maybe 6x6 or 6x12 accent row around the top)

Pedestal Sinks help and in small bathrooms create more space

Chair Rail Dining/Eating room and just paint the wall white under it

These are just a few ideas I try to do and im looking forward to other responses on this thread.

Hands down my worst situation was a high speed chase that started at one of my buildings and ended with the suspect running into another house. He had a AK47 on him. It was tenant that I inherited from the previous owners boyfriend. Not a proud moment when you working out at the gym at 6am and see your property on the news....

Not a terrible situation but some of my best tenants just lost there jobs and cant pay this month. I hate evicting in December. Tenants was a mailman and was just laid off. He is still waiting for unemployment to kick in. They have been excellent for years and he calls me daily with an update (communicaiton is critical and the only reason I am working with them). I am giving them a little extra time and had them sign a right of revision but wont hesitate to evict around hte holidays if things turn south.

I also have a few policies through my broker at cincy insurance. A broker is a good start because they can quote your needs with 5+ companies in some cases. Another good idea is to only get 500k liability and a umbrella policy over all properties for 2m or so. My 2m umbrella policy is only $200 a year and effectively creates a total of 2.5M in liability on any particular policy.

I just went through this and ended up changing all of my insurance. I would recommend replacement cost as all claims are depreciated with cash value policies. ex. 20 year roof needs replace at 15 years, you would only get 25% of the cost. The key is to find an insurance provider that will give you a replacement cost policy as close to market value or your basis as possible. I tried to push for market value to at least protect my equity. Another key thing to look for is hte option to be paid out vs. rebuild. I just paid 140k for a 6 unit building that would probably cost 500k+ to rebuild. I did get a replacement cost down to 220k but obviously couldn't rebuild for that (nor would I want to). I shopped 5 or 6 different providers and finally found a broker that could get the replacement cost policies closer to where I want. I did not get them as low as I would have liked but still saved thousands a year in premiums across all my properties. (btw..the underwriting company that was most flexible was travelers insurance)

Thanks for the info and great response as usual, Jon. My current 401k is with an employer and am just doing some preliminary research. I have found that some custodians offer a borrowing feature and some don't on solo 401k's. I think this strategy could be a great opportunity when used responsibly for short term transactions (ie fix and flips).

I know this topic has been beat to death but I cant seem to find answers to a few specific questions

1. With a solo 401k, you can borrow up to 50k on a tax deferred basis. Can you borrow this money for flips, keep the profit for yourself (outside of your plan and obviously subject to income tax) assuming you pay back the loan to your plan?

How does this differ from a a Self Directed IRA? I do understand that you don't have a 50k cap if your funding the project in full but it also has to be passive in nature. I would imagine having a custodian in the middle of everything would be a real pain.

Does anybody have a good resource or link that lays out the specifics of SDIRA's vs Solo 401k's?

Steel toilet handles,levers and a good chain! Plastic ones break so easy and apparently tenants hang them from. I do it right the first time so it saves me a trip out to the property when they break it.