All Forum Posts by: Dan Buhr

Shane, did you end up getting anything? I'm looking at doing the same thing & was wondering if you got anywhere with this.

Would love to hear your story. Thanks!

Just finished rehabbing my 1st flip property and have it FSBO. Have a qualified buyer (from cursory investigation) who would like to do a Land Contract. However, they would be able to get a bank mortgage in 3-6 months and could buy the property outright. I had them chat with a MLO I know and they told me the same thing. I'm interested, but have some hesitations as I'm not familiar with LC's. I have a good RE Lawyer who does LC's so that's a plus.

The couple, though, has a daycare that would be in the house and that concerns me. Obviously I could mitigate possible house damage with a down-payment or something put in escrow - but is there any concern if a daycare child gets hurt that the parents could come after me as the deed holder.

Beyond all that, I'd love any input on structuring a short term deal like this. Still a LC? Or other better options? Or hold out for a traditional offer from a buyer?

@Ryan Dosenberry did you ever have success finding contractors? I just finished my first flip in Grand Haven and would like to build some relationships with contractors too. I have some subs we used that I could get you in touch with if needed.

Wow Todd, looking forward to hearing the story at the meet up!

@J Scott, first of all, thank you for responding. I am almost finished with “The Book on Flipping Houses,” and have already referenced several times “The Book on Estimating Rehab Costs.” Both have been huge assets to me as I begin this journey. Also, I have greatly utilized the spreadsheets that came with the books!

Your questions are exactly what I need to make sure I consider. I agree with your first point as I have spent countless hours (in the evening after my day job) studying our market, looking up properties, visiting them, analyzing them, getting my finances in place, etc. I am the one taking the majority of the risk and putting in a ton of effort on the front end. I think that should be compensated.

The GC in this flip isn’t an actual GC, just someone I know who has GC experience who wants a side hustle and is willing to risk making $0 for his time and effort in managing the construction end. We all realize that this project could end up being a huge learning experience with little to no profit.

Maybe part of my question should be if there are some structures in place that folks have used (and we can make it easier with just one monetary investor) - whereby the investor is taking risk with $ and time put into the deal and the GC is taking risk by investing his time to the project for a % of the profit. How have these risks been quantified so we can put it down on paper before we get into the project. I realize part of this is subjective and has to be figured out between parties involved. Hoping there are some proven and already implemented structures out there. Does this make sense?

I put a couple bids into the GR market on the NW & NE side and it was crazy competitive. I think you either need to find the deals off market, have cash or bid high...or any combination of the 3! I love the GR market but it is really fast paced from the little I’ve seen!

How are you looking for your deals?

My first house is under contract with the plan to fix and flip. I am the primary money investor, deal finder, deal analyser but also have a secondary money investor. We also have a construction manager who will be providing GC services free of charge for the actual rehab part of the job (our monetary investment to fund all construction costs, he will be providing general labor and management). So, I’m trying to come up with an equitable way to set up the partnership. My thought is to give the CM a set % off total profit and then primary and secondary investors get % of remaining profit based on total invested. For instance, a rudimentary example:

Total $$ Invested: $100,000

Primary Investment: $80,000

Secondary Investment: $20,000

Total Profit: $20,000

CM @ 10% Fee off top = $2,000

Remaining Profit: $18,000

Primary Investor @ 80% of remaining profit = $14,400

Secondary Investor @ 20% of remaining profit = $3,600

My only thought is that I, as the primary investor, have put in a ton of time finding the deal and financing it in my name. Do I take an extra percentage for that work or is that looked as being greedy/selfish? I want everyone to make money and desire to work with me again. Thoughts? How has the community structured similar deals?

Dan, I’m new to RE investing too and have been looking for properties to flip. I have my first property under contract right now in Grand Haven and am learning a ton through the process. I’d love to keep in touch with you, maybe we can share what we learn through the process!

Hey guys - thanks for the input. From your comments and discussions with a commercial lender, I'm realizing this isn't for me. I need to stick with properties I can get conventional financing on so I'm going to keep my focus on fix/flips and brrrr properties. Your input helps me confirm some of my concerns (neighborhood, commercial terms, education). Thanks!

I'm brand new to real estate investing and found a 6-unit multifamily house in my area. From what I can gather, there are around $10K in annual expenses (insurance, heat, electric, water, taxes, upkeep). $100K is asking price and annual rent income is $36K. If I am able to get financing to put 20% down, this should cash flow well on paper right? What strategies should I look at? It needs some help to bring units up to nicer living standards, possibly could pull in better rent and tenants as well. I don't fully understand commercial lending process and could use some help knowing what options are available if/when I get financed.