All Forum Posts by: Account Closed

okay good to know! Ill keep looking. 

Sorry for the confusion out of the 5 flips 4 were out of pocket the 5th was the lender that was a huge pain and now for another project he will only fund if the rehab is part of the loan. It put me in a bad spot as the turn around time was 7 days for the money and I payout weekly to everyone I work with. I also don't want to pay interest or points on money I don't need or want. 

Hey everyone I am expanding my REI business and I have done 5 flips in 3 months. I am speaking with lenders on getting loans for my next big push this upcoming year and I can't seem to find anyone who just does the purchase price and let me complete the rehab with my own dollars. I tried one of the 5 the normal way with everything almost funded but it was a huge pain with the drawers (they deposited with checks for some reason so it took an additional few days to get the funds) and I had to deal with a super lame system to even get the drawers sent over. This slowed down my flip considerably and increased my cash in the deal as I had to bridge the money for my crew while waiting for a banker to go to a bank and deposit a check.

Is this an industry standard? I am using my own cash completely to help me acquire deals and I am looking for a lender to come in after I already got everything lined up so I can close in a few days and get my cash back in the following few weeks. 

I know some people who would take that in 3 seconds 

Right now the best way to analyze these deals is looking from an owner-occupied/STR strategy. Most multi-family properties do not perform well in CLT due to how hot the market is for the whole southeast for that type of asset along with a couple of local factors. As someone coming from an appreciation-only market prior to moving to NC be the best way to look at it is from the 2-5 year approach and factor in things like local growth, school districts, employment centers, and the bottom line of the property. You are not going to find anything that is a "solid deal" right off the bat for the downtown market. But if it's only costing you a couple of hundred bucks living in a property that is getting at least 5% in appreciation while adding in all the other factors like debit yield & income growth. Then by year 5 you usually would have a solid or home run deal with you did your due diligence correctly.

My CA rental was the same. Barley cashed flow for year one but by the beginning of year 2 already had a 45k growth in appreciation and around $200 in rent increase due to SoCal's lack of inventory and it's a 7% CoC. Not bad considering I just purchased and rented it out with a PM with no rehab.

The DIY approach is a personal preference and depends on how you value your time. If the margins are thin and everything is falling apart I will get in there and get on the roof or under the crawlspace to get some unskilled or basic repair/labor done. But 9 times out of ten I don't do this as it's not worth it for me. I am better off looking for more deals as I do REI full-time. I order all the materials and finishes and then drop them off at the worksite and walk the project 3x times a week and bring lunch occasionally for everyone and sign the checks on Friday.

If this is your first deal and you just want a property or two and you can get it done quickly or get some subcontractors to handle other parts to speed up the process would be my personal preference if I would go the DIY route. Labor will always be the biggest cost and while materials are expensive right now labor still outstrips it percentage-wise. So sometimes it's more advantageous to have someone do something correctly and quickly vs you struggle for 2 days. You can save 20% percent on material costs but material costs are only 30-40 percent of the cost so in the grand scheme of things you aren't saving as much on the overall project that you would think. 

@Alex Medearis

Also no one will share the really good contractors right now due to how the market is! Best of luck.

@Alex Medearis

Hit up Facebook market place and investor groups on social media. Put a lock box on the property and run as many people through as possible also ask them for recommendations for anyone they know that can cover parts of the job they can’t. I just did the same with my one flips and had around 19 people go to the property. I was their for some but as a rule of thumb whenever two guys showed up I knew I was wasting my time. If they can afford to have two people do the job of one then you know the pricing will be high or they work with people who are fine with being overcharged for smaller projects.

Just do this. Will you move your family to the target market and live there for at least 10-15 years. If it is yes then go with that market. If all the micro and macroeconomics line up then pull the trigger and start building relationships. Don't waste time trying to build your own spreadsheets or stuff like that. As an OOS find a good team and let them run the show while doing your due diligence on their numbers and roles. You will pay a premium for this but at the same time, it's the best way unless you really want to do this full time. 

Wanted to see if any other flippers have ever installed split units for a flip in a Class C neighborhood vs an entire HVAC system. I figure that it will be around 1500 to purchase 2 units with around 1000-1200 in labor for installation totaling around 3k. HVAC is looking around 8-9 with new ducting in an 1100 sqft house. Wanted to see if anyone had experience with this or thoughts.