All Forum Posts by: David Mo

@Jim Kalish Thanks for reading! My tools will sit in my shed forever until I need to impress someone with my newfound handyman skill :) Best of luck to you! 

Thank you @Michael Kinsella and @Tonya Kelly! 

@Brittany Stradling Working with others allows you to leverage resources and opens doors that you wouldn't be able to get into yourself. The components of getting a deal together include finding the deal, finding funding for it, and then managing the deal...contractors and realtors for flipping, property management for buy and hold, etc. Money is cheap and management isn't difficult...it's finding the deal that's the bottleneck. If your goal is to scale quickly, start looking for off market multifamily deals. Pull a list of multifamily units in your county (if that's a feature), or go driving around and writing addresses down. Find the numbers of the people who own said properties and start the conversation of potentially buying their place. Follow up with those who may be interested in the future. Once you actually are negotiating for something, so long as it's a good deal, you'll be able to find money and partners. 

Connect with realtors that work with larger properties and let them know you're buying. Lots of these bigger transactions happen off market through word of mouth and connections.

Just some ideas I'm throwing at you. The beautiful thing about real estate is that there's more than 1 way to do something. 

In general your ARV range should be within a 5k range. Once you have that you can figure out how much you can refinance out and how much left you'll need to pay off your hard money loan. I recommend building a relationship with a realtor, but figure out how to provide value in some way in return. Or, just practice more and have someone review your work. How are you getting your rent numbers?

As some have hinted, this smells like a city owned property. Everyone has their preference/strategy when it comes to investing, but I would strongly consider the area that the property is in and how that might affect your investment 5 years from now. 

Some more information could help us give you a better answer. What zip code is it in? What are some cross streets? What type of property is it? 

@Marcus Auerbach With lumber prices you might actually make something. And at the very least, the neighborhoods you're buying in would start to look a bit better after some time :) 

@Guillermo Vladimir Robles I've seen a lot of similar deals to the one you just described and they're usually in not so desirable areas. Some things to consider: 

What will the ARV of the property be after essential repairs? If the ARV is $70,000+, then it's potentially a good flip. If the ARV is going to be around what you put into it, you're better off just buying a property that's already in decent condition and saving the time/headache of renovating.

What area is this property in? A $60,000 duplex that rents for a total of $1300 looks good on paper until you realize that the tenant class you're renting to doesn't care about the property and the maintenance costs eat up your cash flow.

In general, those properties have gotten to that condition for a reason, and that reason is enough for me to stay away from those types of deals. 

Investment Info:

Condo fix & flip investment.

Purchase price: $35,000
Cash invested: $5,000
Sale price: $67,000

My first flip project! A wholesaler who is now a great friend brought the deal to me. We decided that he would bring the deal and I would work the rehab and split the profit and costs 50/50. I ended up doing the work myself and learned a lot of handyman skill in the process, but this flip took 2 months to complete when it could have taken 2/3 weeks with professional contractors, and I didn't end up saving much money because I had to buy my own tools! Next time we'll stick with contractors.

What made you interested in investing in this type of deal?

I wanted to break into the flipping business and the numbers on this deal allowed for a lot of room for error in case things went south.

How did you find this deal and how did you negotiate it?

This deal was brought to me by a wholesaler.

How did you finance this deal?

We both put in 5k and financed the remaining 25k through a hard money lender.

How did you add value to the deal?

Small things can make a huge difference. I gave the whole space a new paint job, added black fixtures, and installed new carpet.

What was the outcome?

We ran our numbers assuming a 65k sale price as the best case scenario. We ended up accepting a 75k conventional offer that appraised at 67. Still beat our expectations!

Lessons learned? Challenges?

Time is valuable. I spent 2 months fixing this place up due to lack of experience and not having an exact plan on how what to do first. I think next time if I do a project myself, I'll finish 1 thing at a time instead of working on multiple tasks at once. It may have cost slightly more to hire a contractor, but the peace of mind and extra time saved would have been 100% worth it.

Investment Info:

Condo fix & flip investment.

Purchase price: $35,000
Cash invested: $5,000
Sale price: $67,000

My first ever flip project. The deal was brought to me by a wholesaler who is now a great connection and friend of mine. We decided that he would bring the deal and I would work the rehab and split the profit and costs 50/50. I ended up doing the work myself and learned a lot of handyman skill in the process, but this flip took 2 months to complete when it could have taken 2/3 weeks with professional contractors, and I didn't end up saving much money because I had to buy my own tools! Next time we'll stick with contractors.

What made you interested in investing in this type of deal?

I wanted to break into the flipping business and the numbers on this deal allowed for a lot of room for error in case things went south.

How did you find this deal and how did you negotiate it?

This deal was brought to me by a wholesaler.

How did you finance this deal?

We both put in 5k and financed the remaining 25k through a hard money lender.

How did you add value to the deal?

Small things can make a huge difference. I gave the whole space a new paint job, added black fixtures, and installed new carpet.

What was the outcome?

We ran our numbers assuming a 65k sale price as the best case scenario. We ended up accepting a 75k conventional offer that appraised at 67. Still beat our expectations!

Lessons learned? Challenges?

Time is valuable. I spent 2 months fixing this place up due to lack of experience and not having an exact plan on how what to do first. I think next time if I do a project myself, I'll finish 1 thing at a time instead of working on multiple tasks at once. It may have cost slightly more to hire a contractor, but the peace of mind and extra time saved would have been 100% worth it.

Welcome @Lou Burnett! I'm a Milwaukee based realtor, flipper, and investor. Please reach out if you have any questions and I would be happy to help in any way I can. Good luck! 

@Erick Duran

Are you looking for hard money or conventional?