All Forum Posts by: Daniel Johnson

@Tim Macy the tide is about to go out and a lot of people are skinny dipping

I use Sherwood Tax Solutions on Perrin Beitel, I've used others in the past with not so good results. Just interview a few and see who you think would be the best fit and understands what you are doing. 

I agree with Jon, it'll be hard to find a good deal on the MLS and act fast enough to purchase. I would reach out to wholesalers and attend some local RE meetups to network and look for deals.

Hey, fellow investors! 

I am putting together my first multi-family deal and wanted to get some feed back on the best way to present the rehab/stabilization period to an investor? I have MANY multi-family spread sheets and not one of them has a section where you can account for the difference in monthly cash flow during the rehab/lease up time? 

Is it best to work out separate 12-month P&Ls to support the annual cash flow on the larger Excel templates? It seems that most spread sheets only calculate annual numbers which leave investors wondering how accurate the numbers are or more specifically in my case, will the cash flow will cover the debt service while the property is being rehabbed and released? 

Any feedback from general or limited partners would be much appreciated! 

We stage every house that is completed and not under contract. There are a couple of ways to look at this, the first is if you want to avoid the cost of staging PRE-LIST your property. If you can get the property under contract before you finish (so the day you finish is pretty much the same day you goto the closing table) then you avoid the problems/cost of staging all together. Think about your loan/holding costs, most are paying $1500+ a month to just sit on a completed rehab, and some lenders are pushing for 45 day closes instead of 30.. thats a lot of profit you can save if you are able to work on the project during that time instead of the property just sitting there. 

For my houses (1200-3000sqft) I pay between $1000-$2000 depending on how complete the staging is. Sometimes the living/dining and master are enough to give the house a good feel, on the bigger homes multiple living spaces and bedrooms may be necessary. I don't pay an additional monthly fee but they are usually staged for less than 2 months (if it sits longer than that you should have a sit down with your realtor) 

Pros/cons 

Pros- Your house will almost always sell much fast once its staged. I have had houses on the market for over a month with no offers, get it staged and the next weekend its under contract. It doesnt happen all the time but in the long run I think it will pay off. Also it actually makes spaces feel bigger if done correctly, if you have a small empty space people will just see it as that. If you have it properly staged you could show a tiny bedroom as an office, making the buyer miss the size of the space all together. 

Cons- The obvious is the cost but I believe 100% if you are doing multiple houses a year it will pay for itself with the money you save in interest payments by selling the property sooner. The only other cons are the possibility of your walls/floors getting scratched (if they are halfway decent this shouldnt happen) and added likely hood of a break-in. I make sure to have double side keyed deadbolts so in the event of a breakin they can only steal items able to fit through a window. This is frowned upon by inspectors (Fire safety issue)  but I just tell them the new home owner can request they be changed if they please but it has definitely kept applianced from walking off. 

Im sorry I do not have any recommendations, but a good place to start would be new home builders in the area. Call and ask who they use if you like the style of their model homes. 

Hey Ryan, 

I only touch old houses for rehabs so everything you mentioned is going to be common, some of the things people have done in a 100yr old home over the years will leave you scratching your head. First of all make sure what ever you are doing is up to code in the area so you will pass all your inspections (even if the city does not require an inspection the mortgage company funding the end buyer will). Next I would look at what other rehabbed properties on the market to get an idea of what a buyer in that area (buying an older home) is looking for and expecting. You could have neighborhoods where people are just expecting cosmetics and cheap finish outs or a more high end neighborhood that a buyer would be expecting new systems, roof, foundation leveling ext.. so for instance the lack of insulation may be common and expected or it could be a must fix.. 

Also, pick up the phone and call a local top realtor. Make sure to be efficient with their time but most would be glad to answer some questions and point you in the right direction.  

I think the confusion here is between people who are flipping and people who have rental units. I would hope as a landlord you don't have any where near even 50 transactions on a regular month, on that many units.. you would be broke. We are talking about spending 50k-150k in rehab costs per house, subbing out every job (I also buy almost all materials for the jobs but I do not pick it up! That way the sub cannot markup the cost on me) . I can go through 2-3 check books per house on top of the countless purchases from different stores on the debit card. Multiply that by 5+ houses (not units) thats 250k+ at a time coming in an out of our accounts. I am proficient in excel but not enough to build and maintain something that would meet our needs. 

@J Scott thanks for the info, I am setting up my QB now following your COA.

@Aaron McGinnis stick around for a while, thanks for the insight! 

Thanks @J Scott, I saw someone else mention that method in another discussion and I believe they mentioned getting the idea from you. Do you elaborate at all on this topic more in your book? Thanks for the help! 

I am looking for some tips, advice, insight whatever, on a problem that my company is facing. We use the houseflippingspreadsheet to keep track of individual projects, which is great, but does not give any sort of company overview. I believe we are going to use a mix of the spreadsheet and quickbooks to keep track of our financials but as for paying contractors and vendors how do you separate each house? We currently have 5 houses in different stages of repair and are looking to scale to where we will have 8-10 properties at a time. Having a separate checking account for each house just doesn't make sense at this level, so am I just stuck manually figuring out what house each charge goes to or is there a better way? Everyone I have talked to maxed out at about 3 projects at one time and could manage 3 check books, debit cards ext so I am trying to see if anyone else has the same problem we do? Thanks for any tips!  

@Darrell Biddings I personally would not waste my money on those seminars and groups. Once you pay their entry fee of thousands, to gain all their "knowledge" and "contacts" you find out all the deals they have are horrible deals you could have found yourself on zillow and the contacts ie contractors and vendors again are just a quick list of people you could have found yourself with a quick google search. 

I would try to find someone in YOUR LOCAL AREA  that has a successful track record that would be willing to partner with you on a deal. There are countless ways to structure the deal but make sure you have a formal contract written up with an attorney bc I AM NOT A LAWYER NOR GIVE LEGAL ADVICE. I would just rather "pay" for my education in real estate in the form of split profits with a seasoned rehabber over writing a check to some guru in a banquet hall. I have found most are willing to work out some sort of deal, after all we are all just business minded individuals playing in the real estate space.