All Forum Posts by: Curt Neider

@Ashley Boyd

Happy to chime in on this. Do you want to be an investor/flipper? Or a contractor?

1. If they want it really bad, sell for $320k as is and let them do the rehab however they want.

2. Set the price at $400k with an exhaustive list of line item costs and selections or with allowances. I would never do this without a very healthy down payment and understanding that you just signed up to be their contractor/designer and hold their hand through the process. If you can outsource these roles, that might help. As investors we tend to look at houses as assets. Homeowners are much more emotional about them. Even if it is only 1 out of 5 that is a hassle, you won’t know until it is too late.

3. Finish it your way 100% and then list.

I have had both kinds of clients and the picky/needy kind are just not worth it. I also learned too late from some of my mentors that they never build custom or semi-custom homes for first time homeowners. They don’t understand the maintenance and repairs that are just standard for a homeowner and don’t have practical expectations.

I had a mentor that used this strategy: He would meet any potential build client at their own home to review costs/negotiate. He paid attention to every detail on the way in. If the lawn was cut perfectly, add $1000. If you are asked to take off your shoes, add $1000. If there are vacuum lines in the carpet, add $1000. If there are no dishes in the sink and the house is spotless, add $1000. This is more than is practical for most of us, but you get the mentality.

In the end, it depends on how you want to spend your time and how much risk you are willing to take on.

If you do choose to let someone come in and make changes it might be worth asking an extra 5-10%. Most homeowners aren’t doing the same research and don’t know how to finance a purchase with rehab. The fact that you already have all of that lined up could be a big value for the right buyer.

Good luck!

6 months is ridiculous and anti-development. There is no other excuse. 

@DeAndrea Douglas

My first rental was a home that I bought for myself, hacked (sort of), and then rented it when I moved to another county. The neighbor, who was a friend, would always give me a hard time about it because he didn’t like the renter and there were quite a few homes on the street in a similar situation. As an investor, who cares? As a person with friends on the street it made me empathetic to the energy and dynamic of the neighborhood.

We all know renters/investors and homeowners tend to take care of their properties differently. They have a different involvement in the community. Etc. These are all generalizations, but they CAN be true, and are concerns for some people whether accurate or not.

I think it’s a good reminder to us as investors to look at a rental as more than just an asset. Be friendly, get to know the neighbors, offer to be involved as needed. Or don’t. Haha. I don’t care. Just another way of looking at the issue.

@Anson Young

Thanks for asking! I’m still getting used to the platform so pictures might take a minute. 🧐

No problems with design as we designed it ourselves and are familiar with city permitting requirements. I think on this one, we had a plan into the city before closing so we were in the ground within two weeks. Total build was about 8 months because I self performed a few (too many) trades. It was a good lesson though because on earlier houses I really saved a lot of money through DIY. It was the same on this one, but since I am at a different point in my career it was less impactful to me personally and I can now weight the interest cost compared to the DIY. I don’t think I would do a single trade on the next one.

I love the idea that entrepreneurs and investors are risk takers or mavericks in some way. 

THEY ARE NOT! 

Research shows that the best investors and entrepreneurs are not risk takers at all but are actually very good at doing due diligence. Research the market, research your funding options, have an exit strategy, have a strategy for what you will do if you CAN'T EXIT, etc. 

This business isn't about gambling or taking big risks. That's for dummies. 

It's about getting answers to all of your questions and then being comfortable with the deal. There will always be some risks. What if the cartel moves into your property? What if there is meth and dead bodies stored in the walls? What if the foundation is paper mache? Don't overwhelm yourself and also pick good partners. (Agents, contractors, lenders, etc.) 

If you are specifically worried about your cash, then have a bullet proof plan of how to acquire and get your cash out ASAP. (Wherever you have your cash now is also technically a risk anyways.) Easy enough. 

You can do it. Good luck! 

It sounds like you have a first world problem on your hands! 

First, if you work with a long term rental finance lender, rather than your bank, they won't even care what your income looks like. Either for the cash-out refi or for the next purchase/flip. They are going to focus on deal metrics.

However, regardless who your lender is, you will likely take a hit on your interest rate when doing a cash out refinance so you should compare how much rent you are giving up to interest compared to the value you are getting from the next project. As a lender, I would say get that refi done! But as a conservative investor, is it worth considering how long it would take you to come up with a down payment through cash flow alone? Maybe if you wait a year and save your profits you can keep all of the existing cash flow and still add the second property? Fix/flip products are getting pretty competitive so the amount you would need to put down is lower than in the past. 

Kudos on that project though. I would buy that project any day of the week!

You might want to see if this guy is available...

I have a great existing participation agreement available now for $78,150. 2 points and 12 percent interest. 

In addition to our other products, we offer short term bridge loans on real estate. Our private lending products are always short-term and highly collateralized (50-55% LTV).

If you are interested in being added to our participation group or are interested in purchasing existing performing participation agreements, please let me know. Minimum interest is $50k. 

Investment Info:

Single-family residence fix & flip investment in Bluffdale.

Purchase price: $165,000
Cash invested: $335,000
Sale price: $740,000

Single Family Spec Home.