All Forum Posts by: Dell Schlabach

We track all our individual rehab properties by class...makes it very easy to get a quick look at any property costs, to date, at any point. 

We typically have 8-10 rehabs in the cycle at any point, I do a weekly class report, and gives me a snapshot of where we are with each property at the end of every week. If anything looks off, its easy to dig deeper real quick to see the individual transactions. 

I would highly recommend having a QuickBooks accountant/ set up your initial categories and give you basic training. Then I would have him/her review on a monthly basis to make sure things are being entered correctly. After that maybe once a quarter. 

Its easy to go awry, nothing worse thenentering hundreds of transactions to find the were not entered correctly. 

Tremendous asset if you set it up right in the beginning. 

@Sarah Miller I missed at Brandons webinar. 

Finding private money is a bit like learning anything else, its hard before it becomes easy. 

Today, anytime I find a good deal, I make the offer, write the contract, "confident" that the money is available even when nobody has agreed to fund me yet. 

In the early days, I did numerous hypothetical scenarios presentations to potential private lenders, using listing printouts of actual sold properties, real comps, with summary sheet of ARV, expenses, pruchase price and profits. . I would meet with individuals who I thought might be interested, showed them a basic presentation. I would ask, if I come across something like this again, would they be interested in funding/partnering.

If you are looking for private lenders such as friends or acquaintances, you may find it helpful, less pressure on both sides if you run potential scenarios past them to get a sense of their interest and  ability before you are under pressure to close an actual deal. 

However if its a screaming deal, you can always find the money if you talk to a few people who know a little about real estate. 

In the early days I did my list of 20 people, forced myself to write down the names of 20 people I knew who I thought would have the money, ability to do a deal. I never had to call all 20 before I found someone to fund.  

Yes and with icing on it if you find the right lenders. If you refinance the duplexes you can reuse that cash for down payments.

If the deals are good enough, locally you can get private and some hard money to fund purchase AND rehab until you refinance with a bank. I am aware its not typical, but all our rehabs with private money loans for rehab deals are funded at 100% of purchase and rehab up to a max of 80% of ARV.

@Sarah Miller heres a guy @Jared Lichtin I would suggest buying lunch or coffee, he is a joy to hang out with, talks faster than I do. He is in akron. Young ambitious, retired attorney who just quit his legal work to do real estate investing and real estate training full time.

A guy to watch, hes going to go far. Get to know him while hes still willing to share his knowledge for the price of a good meal, before he starts charging 20,000 for a boot camp. 

I would have to agree. 

My primary lender, although most people refer to him as a hard money lender, I consider him a private lender, we have become good friends over the years and I have been able to reduce our interest rates by more than half of what we were paying four years ago. This is due to the fact we have become more experienced, more stable thus reducing his risk, providing quicker turn around cycles and w now have better assets securing the funds.  

@Sarah Miller We have used a dozen or so private money lenders to fund rehab deals, we are using four currently. Two of them do one deal at a time, currently 80% of our deals are funded by two individuals.

Most of our the private lenders came from friends and business relationships, a lot of networking and sharing with everyone what we are doing in the beginning. Most private lenders will start with one deal, if that one goes well, they  can likely do two at a time maybe more, and they have friends and acquaintances they will refer as well, if you take good care of them. 

It is not easy for most people to get 10% return on their money without high risk, while at the same time for most real estate investors 10% is relatively inexpensive short term money.  There is a lot of money available looking for deals from, solid borrowers. 

There is a local bank,portfolio lender, that loves to finance real estate deals for investors with w2 income. They are pretty good about refinancing cash flowing properties as well, so you have a number of options. I notice at least two other people on this thread that have/or had private money available to lend to investors for real estate deals. So have coffee with the locals, and the ones from carrollton  :-) they can probably help, or connect you with the people who can. 

@Anthony Micklus

.... most of our money comes from private investors

...you thinking about moving to Ohio?

... bit difficult to run rehab projects in Ohio, living in VT.

We deal with quite a few septic and wells on rehabs, we always get a septic inspection. In our area they not only inspect the tanks, they run water to test the leach lines. They typically run water in the bathtub, add some, dye to the water, run about 150gallons of water for a three bedroom house, and watch to see see if any dye shows up where it shouldn't.

As previously mentioned, the leach lines tend to fail much more often and sooner then the tanks.

Typical septic replacements for us, 8,500 for an off lot airation system, up to 16,000 if they have to install mounnd or drip system.

WellsWells, majority of problems are pressure tanks, well pumps, typically under 500. Dug one new well 4,500. 

Its always good to ask people what they want, if its reasonable then work with that.

People who have money in savings accounts or CDs may think 8% is an exceptional return. While other family members who know what hard money lenders charge may think 12% is low. 

We pay 6-10% for our private money, so I would not pay any relatives more than that. If your hard money is costing you 15-20% and your relative is willing to lend at 10% there is no need to offer more. 

Most important thing is find out what they want, if they want you to propose a rate, ask them if they consider 7%  good deal? You might be surprised at the answer, you can always go up a few points, its hard to get them down after you have proposed a much higher amount then you needed to. 

@Katy Shearer

 couple ideas for you :-)

http://www.biggerpockets.com/forums/93/topics/1847...