All Forum Posts by: Dan White

Quote from @Ron Brady:

@Mick Murray

Congratulations for making the leap. My wife and I started real estate investing after age 50, so to us, you and your wife are very much ahead of the game. And we too came from the non-profit world our entire careers.

To your Qs, here are our two cents:

Partnerships - Typically it is a veteran investor with the funds of others, not a new investor with other's funds. To be candid, knowing what we do today--8 properties in--we would not be comfortable investing with private money when we started out. We felt the same way when we started. We simply made too many rookie mistakes that would have lost our investors money. Not saying you should not do it, but we wouldn't. As an alternative, we'd recommend you consider a HELOC or cash-out refinance as a means to take as much equity from your home as you can as your starting capital. Small capital starting point strategies we'd recommend you to consider are short term renting a room in your home, mid-term rental using arbitrage or wholesaling. Once you have enough cash on hand, you can drop the start-up strategy and choose another one.

$10k/yr in 10 yrs - Not too ambitious, depending on how much time you and your wife can put into the work. Short term rentals generate big cash flow fast, but require lots of time. Single family long term buy and holds, generate far less cash but are more passive. Thus your cash flow goal and strategy are related.

Other tips: Keep reading the BP Forums and listening to the podcasts, consider joining a local REIA and try out https://podcasts.apple.com/ca/... which caters to old dawg's like me (and maybe you).

Best wishes to you!

 This is a great well thought out answer. All great advice. 

The only thing I would add is to find out your long term and short term goals. I flip full time for income taking the leap at 48 years old - another old dog. 

My business partner and I worked on getting flips done as our primary income generator and have found buy and holds as we progressed through the last 2 years. 

Our long term goal is to keep flipping and invest in Multifamily opportunities with our excess revenue. This is more appealing to us since we don't really enjoy being landlords. It is not for everyone. We are hoping that after a few more years we will have enough money invested to have that Multifamily income completely be our only income. 

Bottomline is that there are multiple paths to financial freedom through REI.

Keep digging and see what fits you and your goals best. 

To answer your 1st question: You can get capital through hard money lenders. You will need some skin in the game on the first couple that you do. Usually they will do 80% and you need to have 20%. But they are taking the risk with the biggest portion. They will also be an amazing sounding board for a deal's viability. They won't fund a bad deal. If you are looking to flip this is the way to go. If you looking for a buy and hold you still may have to get some non traditional lending to get going. But still expect to put 20% down. 

Best of luck - reach out anytime with any questions.

Quote from @Cory Lader:

Both strategies work in any market, the key to being successful is by buying either type of deal correctly.  Account for decreased ARVs, unforeseen renovation costs, etc. Pad your numbers during your underwriting and you'll typically come out on top.

You make your money when you buy correctly.

You nailed it. That is exactly what we are doing. ARVs are down as we try to forecast worst case scenarios for 2-3 months out. Building materials have seemed to stabilize a bit. But we are adding time to our holding costs as well. More time on market equals more hard money costs. Add that up and our offers are lower.

Quote from @Jordan Moorhead:

I have no real idea what's going to happen but I have tightened up my buying criteria

 Same here - we are adding holding time and offering lower offers.

I agree with @Bruce Woodruff - no one has a crystal ball to know for sure. We have been sitting on a 1Bed/1Bath condo for weeks priced way under comps and a great remodel...won't move. Also had a SFH down the street sell in 3 days. We kind of knew the condo had a limited pool of buyers to start with but it has taken a 15-20% hit as of now compared to others in the same building 4 months ago. The SFH sold over ask and with multiple offers. So - while we won't lose on the condo because we bought it well...it still is crazy to see how dramatic the market can be in a short period of time. Side note: I hate condos for flipping. Even before this one.

@Steve Vaughan hit on the one that I have used...lumberyards. They supply the guys that do the work. Same with finding roofers - go to the roofing supply house and a lot of times they have cards up on the bulletin boards there. Always ask the counter people or salespeople who they can recommend. Has worked for me in the past.   

We flip as a full time job and our income depends on having everything dialed in on numbers. I agree with @Brian Miller on the scope of the remodel. Keep it simple to start. Like many have said as well - you make money when you buy it...aka - buying it at the right price will give you room for overages in rehab and a down turn in the market. There are many stories of people buying too lean and losing. Don't be that person.

Quote from @Ryan Pederson:

Hello BiggerPockets community. 

I am currently going into contract on my first multifamily rental. It is a nine plex that had un-screened tenants in place pre-covid, and long story short they turned it into their own country.

I am seeking tips, tricks, and tactics on how to get deals on multiple appliances and fixtures without sacrificing too much quality (every unit needs new… well everything!) Any and all advice is greatly appreciated.

-Thank you and happy investing

I am from the Washington DC area. We have Bray and Scarff for bulk buys like this. Large appliance distributor. We save about 5-10% here.

We have found that scratch and dent companies work well too for large savings. They are not usually scratched or dented - they are usually returned and/or refurbished and still have full warranties. The savings are usually 50-70% on those.

I agree with @Tom Fidrych on this one. Until you know the actual issue, there is no way to truly know the rehab. Also, the county or city is now involved. This will add time to holding costs as they will want to inspect the work most likely. 

As far as answering your initial question:

You need to know your ARV, Acquisition Cost, Financing Costs, Holding Costs, Selling Costs, and Rehab costs to properly do a calc. All of these should be close or you will lose money.

An inspector will not give much value for initial rehab costs. I would reach out the a GC and get them to offer a turnkey price for the work. Once you get a few under your belt, you can tighten up these costs by managing yourself.

We use Propstream and love it. The UI is easy to deal with and very detailed. Not sure on the other programs.

Quote from @Shiela R.:

No,  I have never lost money bc I ALWAYS buy at a discount.  Sure, there have been times I didn't make quite as much as I had on my spreadsheet but never have I lost money on a flip.

 Nailed it. Same here - we always say you make the money when you buy it. The rest is the work to get that money out of it.