All Forum Posts by: David Rosenthal

Absolutely NOT! I was in this program, simply for the "boots on the ground" @3k/month in Philly to test out two deals there. The value for us was basically paying 3k/month for a project manager, which we built into our reno costs and fit our model. I'm a seasoned investor, lend to other investors, and have done deals in other markets with strategic partners there, but this was not as done for you as he sells it and we knew that going in. We wanted to test out the lower income stuff though. Currently stuck in two deals I'm struggling to sell in areas I don't want to own. The value in what Brian brings is that IF you find good deals there and WANT TO do them, being in his program, his contractor will front the reno money until you get construction draws back from your fix and flip loan. That allows you to get into more deals (that's great if those deals are meeting your goals, and terrible if not). However, I have the suspicion that he's in bed with his contractor, getting a cut on top what his platform costs you. The renovations his crew did were actually pretty good though. Philly is a tough market to sell in right now, with lots of inventory. Our 5 unit is fully rented, but our duplex is struggling to rent one side. Also, the section 8 rents he uses in his proformas are tough to get, at least in Philly. So, that inflates the ROI on his progromas. Shame on me, I let a couple partners talk me into testing this, and have regretted it since. Expensive lesson learned. Find a mentor you know, that you don't have to pay and build a good team around you.

Looking for someone who's done a lot of section 8 BRRRR deals to share some insight. I mainly flip right now, but looking to build something for the long term with a partner. STL, Detroit, and Philly seem interesting and to have solid sec 8 numbers.

The good (besides the guarantee), the bad, and the ugly?  Give it to me straight please.  If you don't mind, include the size of portfolio and avg cash flow you look for in a deal.

Thanks so much.

Investment Info:

Single-family residence fix & flip investment.

Purchase price: $1,300,000
Cash invested: $16,000
Sale price: $2,000,000

With just 16k of our money, using creative finance, flipped this house in a ski-in location in about 50 days. Turned 16k into 530k after paying lender and private investor back. Don't let people tell you there are no deals out there. They are, you just have to look real hard.

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

We bought an airbnb in Breckenridge. The town put a cap on short term rentals right after, but excluded certain areas. We marketed to those areas to try and find another. A seller called us back and wanted to sell this property, made more sense to flip it.

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

Our realtor sent a targeted mailer to the neighborhood. He stated his price, and we knew it was a killer deal, so didn't budge. Gave him time to close, which he wanted.

How did you finance this deal?

We used a fix and flip loan. 1.3m purchase at 90%, 100% of reno (50k, which we didn't even use). Borrowed 250k from a private money lender (local attorney) at 10%, to be paid in a balloon upon the sale. He knew the area from being a skier, and that we had a great deal, he felt like his money was safe. He's since done another smaller one with us, and is ready to do more.

How did you add value to the deal?

We didn't need to. There were 2 vacant lots that closed across the street for 1m and 2m, so we knew the land alone was worth 1.5m minimum, plus there was a small house on it already.

What was the outcome?

Had pictures and video ready before we closed, and relisted for sale the day after we bought it for 700k higher.

Lessons learned? Challenges?

Great deals are out there, you just have to look really hard.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

A realtor helped find and negotiate, but we had to hold his hand quite a bit to ensure our contract was solid on the sale. He found us a great deal, but also made about 165k between both sides in 50 days. Not bad.