All Forum Posts by: Brian Kantor

@Drew Sygit, thanks for responding. I figured as much. Any additional insight you can share? 

Hey, there. Currently a buy-and-hold investor in and around Detroit closing in on my second rental. Was recently introduced to the concept of pre-fab construction and was wondering if anyone had any experiences to share (either positive or negative)?

There are a ton of empty lots across Detroit, which seem in theory like "easy" places to pop up a pre-fab SFH or small multi.

I did some preliminary research here and via Google and see that most people's experiences seem pretty positive with key draws being the cost = less than or equal to standard construction, materials being eco-friendly and sturdy, shorter construction time, similar appraisal value, to name a few.

My questions:

1. Can anyone share any experiences specific to Detroit or the surrounding area with regards to permitting or legal pitfalls to avoid or hurdles to jump over?
2. Process: Do you hire both a pre-fab manufacturer AND a GC to stitch the pieces together or are they one and the same?
3. Specific vendors that service the area with a good reputation and experience with small multi-unit in particular?
4. Is the mortgage process any different than with buying an existing structure?
5. Cost? I know there is a range, but for a four-plex for example of 4000-5000 square foot, what can I expect in hard + soft costs?
6. This may be a dumb question, but are these usually built on slab foundation or with a basement/crawl?
7. Does this affect tax assessment in any way?
8. Any other points of note?

Thanks in advance, and Happy New Year!

Welcome to the party, @Alexander Canalini. 

I set myself the goal of purchasing my first rental property within 1 year of establishing that goal (aka, the day I officially began my journey), and I succeeded 1 week shy of that 1 year mark. That time included taking a course, researching markets, interviewing agents, property managers and contractors, and making an offer. The process beyond that: closing, renovating, completing inspections and getting my first tenant in there took an additional 5 months. 

The process was slow, but I started from zero and am pleased with how everything went. Working now on property #2, and the process is going much faster as the groundwork was already laid for Property #1.

I often recommend the course I took (Your First Rental Property by Paula Pant), but enrollment just closed for the Fall semester, so you'd need to wait until March (I think) for Spring to begin. Not necessary, but it was super helpful.

At the very least, I'd suggest reading David Greene's Long Distance Real Estate Investing book.

Good luck!

Hi, everyone! Happy Monday. Allow me to pre-apologize for the "dumb" question, but I think the context makes some sense.

I am traditionally a buy-and-hold investor following the BRRRR method of investing and am used to buying distressed properties to renovate and hold onto.

With that said, I recently came across an off-market property via a chance encounter with the owner that is a great one, but for a few reasons may not be my ideal investment. With that in mind, I'm looking to take a cue from those interviewed on the BP Real Estate podcast who are far more experienced than I, and use this as an opportunity to "leverage another exit strategy."

Along those lines, if I wanted to wholesale this property to another investor, how would that process work? Do I take ownership of the property and then "flip it" to the end-buyer? Or do I simply pass the title over at close to the end-buyer at closing? If I don't ever take possession (or just dont take possession until an end-buyer is confirmed), how do I structure the agreement with both the seller and end-buyer to ensure that no one backs out at the last minute? I am not a licensed realtor, but I do work with one, and would love to know how he needs to fit into this process to ensure that I am complying with the law.

Ultimate question is, do any of you have a good step-by-step process you follow when wholesaling a property?

I should note that I do have a decent network of other investors in my circle who could be interested in being the end-buyer.

Many thanks, and Happy Holidays!

-Brian

Hi, @Brittany King. DM me and I can share the contact info for a couple people who I've been speaking with who seem to be very investor savvy.

I have worked with Dave Kaminski at domham.net and have been quite happy. We looked at both State Farm and AmWins policies. (Ended up with AmWins). You may also want to reach out to Matt Moylan of Thomas McGee Group. He's on BP and great to work with. 

Some things to consider, in general, about your policies. Increasing your deductible to lower your premium. I am now paying a $2700ish deductible to get my premium where i need it to be. I look at it as anything under $2700 being more of a CapEx issue, and not a claim, and if I need to make a bigger claim, that deductible wont matter.

Also, worth noting that there are 3x levels of policies. In layman's terms: a low, medium, and a high with regards to whether you're seeking the full value to completely rebuild the property from the ground up, retrieving your initial investment from the lost property via the claim or somewhere in between. I choose to be on the low end of that spectrum for a variety of reasons, and that will help to lower your premium as well.

Hey, guys. They reached out to me on Linkedin. Guy seems nice. Was wondering if anyone has worked with them before and has any feedback positive or negative to share about their experience.

https://www.biggerpockets.com/...

Thanks!

-Brian

Hi, @Steven Dome. In theory, you can use your HELOC money on anything, so yes you could use on a downpayment for a BRRRR.

With that said, finding BRRRR-able properties isn't easy. Part of the process is finding undervalued properties and forcing equity through rehab at such a velocity that you can take out all or most of your initial investment. One of the easiest ways to secure an undervalued property is to pay for it in all cash (either your own cash or via Private/hard money). Many properties that are undervalued are in such disrepair that you can't get a traditional mortgage on them in the first place, plus you typically can get a better deal on an all-cash offer. Just something to be mindful of.

Yes, some lenders will allow you to build renovation costs into the loan. I have one guy that I work with in Michigan who does that. No clue if his bank does properties in PA, but if you DM me, I can share his info.

Assuming that you're able to get all of the above to work, just as with the HELOC, you can do whatever you want with the funds derived from a cash-out refi, so in theory you could pay back your HELOC with those funds. Of course, you want to pay attention to where you have the more favorable interest rate, though, before you do that.

Regarding the "waiting period", that varies from lender to lender. Some require a "seasoning period" where you need to hold the property for 3 to 6 months before you can refinance. Others don't require a seasoning period at all. Really depends on the lender.

If you live and invest in PA, I suggest compiling a list of every credit union in your area, call them all and see about the terms they offer. Everyone has different policies.

Hey, @Vinnie Gatti. Is there a specific reason you want a HELOC vs a cash-our refinance? Assuming the property is held in your name vs an LLC, you should have an easier time finding a bank to offer a cash-out refi that will essentially serve the same purpose. I've spoken with one bank that does allow a HELOC on an investment property, but they require that you own the property free and clear.

If not, try calling more banks. I've spoken with somewhere between 25 and 30 and they all have different policies for what they will and wont offer for a loan. It's tedious, but worth the effort. I try to call 1 to 2 banks a week every week and ask them everything that I might be able to secure with them and put it into a spreadsheet.

Good luck!

Thanks, @Timothy Hero. Would you be able to share any banks or contacts who offer these NQMs either here or via DM?