All Forum Posts by: Daniel Hayes

Seeking advice...

Over the past couple years I've rehabbed (i.e. subbed out) about a dozen houses, but still have very little technical knowledge regarding land development and construction.  I'm at a point now where I'm considering turning this "hobby" into more of a business.  As a first step, I'm reaching out to BP community can help me answer some of my most pressing questions:

• 1) As someone who has no construction related license, can I own a business that builds/rehabs residential real estate?  I'm assuming I can or the rest of this post is pointless. 
• 2) My plan is to find a young, hungry GC to be my only employee and use his license to pull permits.  Over the past couple years I've established good relationships with subs I'd like to continue using, so the GC employee would be there primarily to monitor projects, manage the logistics, protect me legally, and pull permits.  All good so far?  Or am I missing something?
• 3) Business would focus exclusively on spec houses and flips.  How do lenders view start-up construction businesses like the one I'm describing?  Assume I have $1MM liquid assets I'd be allocating towards this business.  I'd like to have 4-5 projects going at a time - in my market that means I'd need access to ~$3-4MM worth of capital.  Is this leverage ratio something traditional lenders allow with a business model like I've described?
• 4) Any particular books or resources anyone would recommend for something considering this next step?
  
• 5) Any words of caution from anyone?

Thank you in advance!

Looking to pick your brains...

I've been dabbling in REI for a couple years. Have a few rental properties and have flipped a handful of SFHs. REI is not my FT profession (nor do I want it to be), but I do want to continue flipping a couple houses at a time (6-10/yr) to supplement my other income. I live in the Nashville market, and most of my experience has been with properties wholesaling for 150-200k w/ an ARV 250-300k. I enjoy flipping a couple houses at a time, but I don't want to turn it into a FT job.

My question:  I have ~$1MM cash and I'm trying to determine the best way to put it to use.  I've considered simply buying properties with that cash and avoiding financing all together, but I'm afraid that will lead to a significant portion of my cash "sitting on the sidelines" more often than it's being put to use.  

My latest idea is to put most of the cash in a relatively low-risk investment - mix of bonds and gold ETF - then take an SBLOC against that portfolio to purchase my flips with.  My reasoning - my cash can constantly be at work in the aforementioned portfolio (as opposed to a money market type of account), but I still have access to 60-70% of the cash to continue flipping a couple houses at time.  

Any thoughts from you sages?

Thanks in advance -

Daniel