All Forum Posts by: Derek DeVerna

@Daniel Shchyokin If HUD is listing the AC unit as damaged I would plan on replacing the unit. In order to get an estimate for this I would determine the size of the AC unit, snap some pictures, and call a licensed HVAC Technician in your market. Ask him or her to give you an estimate over the phone.

I do not enjoy wasting my contractors' time. Great contractors are typically busy people and a knowledgeable HVAC Tech can absolutely give you an estimate over the phone. They will likely need some details pertaining to the unit and a few pictures. They will also appreciate your taking their time into consideration. 

Best of luck to you, 

Derek 

@Tuvia Goldstein I am glad to hear that you are taking advantage of the BRRRR model. Conventional banks will want you to own the property for at least 6 months before refinancing. They will also only allow you a certain number of loans and want you to place the properties in your name rather than a company.

For this reason, I have moved towards commercial lenders. The local commercial lender that I use in my market can fund up to 80% Loan to Value of the property. I can also refinance out of my project as soon as the unit is done being rehabbed. 

I would suggest trying to sit down with three commercial lenders in your area. Bring them your portfolio and business plan. Explain to them what you are trying to do with the BRRRR model and see if they can help you. Let me know if I can help in any other way.

Best Regards, 

Derek

@Tariq K Frantz I personally prefer using cash for BRRRR projects. This is not to say that someone just starting out isn't able to get their start with Hard Money.

@Kevin Sobilo is 100% correct in his "project" explanation. There are almost always unforeseen issues that arise when rehabbing a house. 

For this reason, one must be extra conservative when calculating the rehab, holding costs, and after repair value of any potential BRRRR property. Especially if those holding costs involve the utilization of hard money.

I would suggest funding your first few deals Cash and possibly moving to Hard Money once you have a strong system in place. However, if using Hard money is the difference between doing a deal and not doing a deal, then I would suggest using a HML to do the deal!!

@Jerry Jawuan Huggins I target tax delinquent homeowners that are over $2,000 behind on their property taxes. This works well in my market, but every market is different. If you don't have the capital to invest into direct mail, then i would suggest continuing to send low offers on MLS homes. Eventually something will stick.

Good Afternoon Luther, If the property has been listed for 18 months at 45K I would strongly encourage you to send in an offer below list price. Within this offer I would write a contingency stating that you will need access to the property to complete an inspection. 

There could be multiple reasons why the property has been sitting so long. The main factor likely has to do with the lack of access provided by the owner/tenants. Many investors are afraid of inheriting tenants or buying a property site unseen. This gives you a tremendous advantage if you are willing to do these things. 

I have inherited tenants in two of my properties in Cincinnati, Ohio. All of which are still renting from me and pay on time. Many times tenants have been subjected to less than ideal conditions from their landlord and are excited about the possibility of having a landlord who cares about them. I always introduce myself as the person buying the property and ask them to provide me with a list of everything that they would like repaired/replaced upon my taking ownership of the property. Complete this list and they will absolutely love you. 

I am happy to help in any other way that I can. Best of luck. 

Hello Natalie, I am a 26 year old full time investor from Ohio. I knew that it was time for me to quit my job (acquisition manager for a real estate investment firm) when the amount of time I spent on work for them became less profitable than the amount of time I spent working for myself/my Real Estate Investment company. 

As you likely know from being on this forum, there are many ways to make money in this business. With this being said, I would still encourage you to save up at least 3 months worth of living expenses before venturing out on your own full time. It can take awhile to get into the swing of things and begin seeing your hard work turn into profit. 

How many banks have you spoken with? Have you had a chance to get in touch with a local bank or credit union regarding your real estate investment plans? I have found that these local lenders are much more likely to value the individual deal/borrower over tedious requirements. I'm happy to help in any way I can. Best of luck. 

@Michael P. 43611 in Point Place if you are familiar. The property is located on the last street before the Michigan border. 

@Craig Tinervin I'm glad to see that you are interested in Ohio. If you are serious about locating solid investment opportunities in the Toledo or Cincinnati markets I would love to have a conversation. I'm a full-time investor/licensed agent and always looking to help other investors. Feel free to send me a direct message to connect. 

@Kyle J. Thank you for your input. Ideally, I would like to assign the contract without taking title to the property. However, I am prepared to close on this property if need be. In the case that I do close on the property I would promptly file an eviction, trash the property out, and list for sale on the MLS (I am a licensed agent). If I am going to go through all of the trouble associated with evicting a tenant, then I will want top dollar for all of my hard work. Even if that means having some cash tied up in the deal for awhile.

@Michael P. I would classify this as a C+ or B- neighborhood. I would also feel comfortable living in this part of town.