All Forum Posts by: Dave Schmidt

@Aleph Kennedy there should be some local or small hard money lenders that would entertain your deal. A true hard money lender will be mostly concerned with the deal and the numbers. So instead of needing an experienced partner you may just need more cash to close. Or the lender may want you to shop out your rehab quote to a couple different contractors to make sure that the numbers are accurate. They can be difficult to find, but once you have a local lender that understands your business model and types of deals they will likely be able to fund most of your future deals as well. 

@Chelsey Nunez There is a saying in the used car business - "there is an a** for every seat". There is always a buyer out there and it just is usually a function of price. Learn what the property needs in the way of repairs and use something like the 70% rule to figure out what a flipper would be willing to pay for the property. 

I would use the fire as a negotiation tool and try to negotiate the best price possible. There is such a lack of inventory with real value add propositions in many areas, so it is likely that the property will attract many investors.

@JR Connor Yes, those "forced" deals usually end up biting you in the end. I have done it myself and also seen it firsthand with others.

I agree 100% with what @John Teachout pointed out. If I had to pick between doing a few very profitable deals versus doing a ton of less profitable deals, I would go with the less stress/less headaches route of less projects.

@JR Connor Unfortunately it sounds like you may be getting in your own way. Spend less time at the projects and spend more time finding excellent deals. 

If you want to get to the next level then it is time to delegate more tasks. Sure you can save money cleaning the floors yourself but is that really the best use of your time? It is probably unlikely you can hire someone that is as knowledgeable about the market and can negotiate great deals for you, so that should be YOUR job.

Hire another crew or contractor, focus on managing projects from a higher level, and then go out and find more deals. 

I have one other thing to add - in my experience I have seen others wanting to scale and do more deals each year, but in an effort to do more deals they are willing to settle for weaker deals. Don't give up margins and risk tolerance so that you can do more deals, this is how someone like you will crash and burn. Stick to your principles, continue to do deals that make sense and have great margins.

@Edward Carrillo Learn the lingo of real estate investing. Invest a TON of time into yourself right now by watching YouTube videos, podcasts and reading blogs. Remember there is a lot of good and bad information out there!

Learn how to find great deals. This is the hardest part for every single investor, seldom do you hear - "I am so overwhelmed because I have so many great deals available to me right now". 

I am not saying to neglect the other parts of the business, but just remember without deals you are a dead in the water.

@Craig Moore I would try to find a local hard money lender to help you make the most of your funds. Or you could do what was mentioned above and find local private individuals to partner with. There are pros and cons to each method.

One thing I would focus on as well is how do you plan on finding deals? Lenders either private or hard money lenders are going to want to see great deals. If you don't have a great deal and there is a lot of risk nobody will want to touch it, so I suggest that you start researching how to find the best deals in your market. 

Another approach maybe to invest passively for a couple years as you are looking for deals or learning. Investing passively means you could invest with a local hard money lender in some of their notes. You may find lenders willing to give 8-10% on their notes.

There is always a ton of money looking for a place to go and grow but the reality is they want low risk deals with large amounts of equity, which at this moment tends to be the hardest thing for most to find. Find excellent deals, be knowledgeable about the business, and limit investor/lender risk and you should be able to find a money partner.

@Erik Meltzer I think this all comes down to - how good of a deal do you have? What is your overall investing strategy? 

 If you can fix and flip and make a large profit to help your business grow, then do it. If you can rent the property out after your refinance and have excellent cash flow, then do it. 

If your strategy is to build a portfolio of rental properties then that may help grow your portfolio. But remember if it is a bad deal it may come back to bite you in the future. Don't do deals just to say you've done them, make sure that there is an upside for you and that you have a strategy going into them.

@Corbett Brasington Although we typically don't hold properties for the long term, when underwriting any deal we like to look at the neighborhood. I typically like to look at crime reports for the area on something like SpotCrime.com. If I can not see the deal in person I like to take a "virtual drive" around the neighborhood with Google Streets. And finally, if at all possible I want to talk to locals and people that live on the same street. It is amazing what you will hear from neighbors and others on the same street, some people will tell you every single secret about the block. Honestly, our go to is trying to talk to a couple neighbors but that is not always possible. 

@Alex Silang How good of a deal are you getting on the property? If you have an excellent deal then selling and moving on shouldn't be a problem. 

If you are buying the property at a steep discount of let's say 70% of the ARV minus repairs, then the prices would need to crash 30% in a matter of months. Just to give you some context from the last recession it took several years for prices to change 30% in many markets.

If you are planning on refinancing, is there any reason you plan on waiting so long? Depending on the project you should be able to move towards a refinance in the next 6 months or so. 

@Bog Morgan I would say that it may be time to find a new realtor. I also second what Bob Stevens said above. If you are truly trying to find excellent deals, you may need to go find the deals yourself.