All Forum Posts by: Chadd Naugle

@Account ClosedI guess @J Scottwas too modest to suggest, So I will....I bought both his books, and would recommend the same.  As a wholesaler accurate repair costs are what is going to give you credibility when you present the deal to your end buyer.  You don't want to estimate repairs at 20k when they are really 30k.

@Nicole Almond I am in the process of my first flip as well, and my numbers are very similar, purchase 58k, 25k repairs, and 130K arv.  I was talking with a friend of mine about how I was second guessing myself.  His words of advice were this..... Look at as a learning experience, and don't expect to hit a home run or certain amount of profit....The bottom line is you did it, and no matter how much money you make is irrelevant, you will learn a lot about the process, and the repair costs, which is valuable if you want pursue this.  

Seems like to me you are buying at a good price, and if there is no chance of losing money, then go for it, and get that first one under your belt.

Thanks for the advice guys @Zach Mitchell, @Aaron McGinnis, Great point about hiring a photographer. I would spend the money for a good photographer, and try listing it myself on the MLS. This is pretty hot area that I bought in. Avg days on market is 65, and the arv is 130K, which I think is great price point, for a lot of potential buyers. It should move pretty quick, the house across the street, sold in a week. So for all of these reasons, I was thinking of trying to sell it myself and save 7K. I guess this is just another reason to get a Realtor license ;)

You guys that are successful rehabers. Quick question for you. How do you market your property after you rehab it?  The obvious is list it with a Realtor, but are there any different approaches that seem to be working.

Though about just putting it on the MLS myself, I think you can pay a fee, and have it listed there without going through a Realtor.

My goal is price it attractively a little below market, and try and get a quick sale.  I am going to put a For Sale sign in the yard while the rehab is taking place.  This is my first rehab project, so I am curious what others are doing to market their property without going through a Realtor.

Thanks for reading.

Looking to build a long term relationship with lender for rehabs.

This is the current deal I am looking to get funded.  Good area, good schools.

134K ARV

58K purchase

29K repairs.

65% ARV = 87K

I have 30K in reserves.  700+ credit score - However this will be my first rehab.

Looking for the best terms.

Thanks

Chadd

@Pavlos Kasselouris  Don't underestimate the value in putting together a deal package together for lenders just as @Jeff Kehl described in his post...This is very professional and will make it look like you know what your doing, even if you don't (yet).

You are focusing way too much on the financing piece....Sellers of commercial properties understand you are going to finance, and they aren't looking for pre-approvals, you are not buying a house.

You need to focus on finding good deals, if it is a good enough deal someone will finance it.  You need to find deals that a bank can't say no.

The last deal I did, I didn't even have to shop for a lender, the deal was good, the broker already ran it by the local bank, and they said they would do the deal in heartbeat....You find those deals, and the financing will come, probably even have multiple choices.

Just my quick analysis....NOI should be around 10,910 @ 50% expenses....Don't count the commercial space....it currently has no income, and that could be your value play, if you get it fixed up and rented.

I don't buy anything less than a 10 cap, and I try and buy at 12% cap rate (based on my numbers not theirs)

Based on this info, I would offer....91K, and spend no more than 109K

But that is just me...you have to come up with your own buying criteria.

If it is buy and hold, then that is your exit strategy. There isn't one unless you refi, or sell.

You can create your LLC, after you get it under contract.

You don't need a broker, but you should use a commercial sales agreement to complete the transaction. The attorney that does your LLC, could draft one for you, or find a commercial broker to see if they will give you a blank one.

Your deal maybe hard to finance, because of the population....most lenders want to see a decent population, to make sure you have renters to rent an apartment to.

@Derrick Atkinson We just had a guy talk about the Non Performing notes at our REI meeting....pretty interesting concept.... The guy is from "the note school" not endorsing or recommending, because I didn't buy his course, but you may want to check him out....

@Lummie Spann Absolutely join as many REI clubs in your area. This business is as much about networking as it is anything else. If you are going to wholesale, you need to go to these meetings and find out who is doing the fix and flips...these are your cash buyers....since you are just stating out, you will want to meet other wholesalers. This does two things...you can partner with someone to show you the ropes....and if you get a deal you maybe able to split it with another wholesaler that has a huge cash buyers list.

@Kris Kaufman  By the way, why wouldn't you take this deal?  You have no money invested in it other than closing cost right?  So cash on cash return is outstanding.