All Forum Posts by: Dustin Frank

Hello BP, I have a contractor client that wants to start flipping houses. He currently has about $10,000 cash and about $20,000 in credit "Home Depot line of credit for materials." I feel confident in his drive and abilities and have decided to put about $10,000 of my own money into his first flip. The problem I am trying to solve is raising the additional capital and structuring the deal. Let's say i find an investor willing to throw in the remainder and we are able to acquire the hard money loan. How do we figure out how much equity his labor and materials are worth?

I would like to also add that you should not use COGO Capital. There are better lenders out there that will give you a much more legitimate POF letter at zero cost, but if you know you already have the funds and think a POF letter is BS, then for a few bucks you can print one off in like five minutes...literally faster than a phone call.

Got a bit of good news today. It's very likely that the lot in question IS already zoned Commercial but an employee of the city made a wrong assumption when mapping and recording about a decade ago. We are waiting on 100 percent confirmation of this but it seems to be true at this point. We should have confirmation next week.

Check out COGO Capital online. They will write you a pre approval letter for however much you need for about ten or twenty bucks. I used them once, it took about five or ten minutes.

Matt, I have a local home builder that wants to do the deal and is willing to buy the lot with cash. The 2 big players which I consider my main competition currently have their hands full. One of them is not interested in development at this time but would love to purchase it after it's built, and the other guy has his energy focused on a 50 million dollar project redoing the Main Street.

Scott, thank you for your input. Correct me if I'm wrong but essentially you are saying to treat it more like a standard contract that closes not "if" but rather "when" the rezoning goes through. The contract would be locked in and I would be committed but if for some reason the zoning never happened I would be entitled to receive my earnest money back. Dorothy, you bring up a good point that somewhat makes me nervous. I would love to hire an architect and have a site plan/ review completely laid out and tied up in a pretty little package but that sounds like money that I either don't have or am not willing to spend at this time. Is this something that I need to accept and fork over the cash immediately for, or should I be focusing on getting this thing locked under contract first? I know this is a rookie question but let's face it , I'm a rookie.

I asked the sellers if they would be willing to go under contract with a zoning contingency in place. They would only be willing to do that if I provided some sort of letter or acknowledgement of intent from the city saying the city is on board with the rezoning. I don't believe I can acquire a "letter of intent to rezone" but I do feel the lot can be rezoned with little opposition. I would hate to do all the leg work for my competition and have someone step in five minutes after it's rezoned and cut me out of the deal. Essentially I need a "contract to go under contract" or a first right to buy if I succeed in the rezoning. Is this a thing? Suggestions or input?

Zach The group that is selling the property is the towns historical society. They want to sell this lot and dump the money into another community project and I believe their opinion will carry weight with the zoning committee. Top dollar is not their motivating factor but they do know the lot is worth substantially more if it's zoned commercial and I'm hoping they will work with me on the contract.

The meeting with the town planning committee was actually tonight and not last Monday. This lot and another lot are both zoned public but are surrounded by a sea of residential and neighborhood commercial zoning. The General consensus of the planning committee was that they do not like spot zoning and would prefer to have neighborhoods more uniform instead of allowing special review on a wrongfully zoned lot. Two things I took from this meeting: #1 is I will try to get this lot under contract with a rezoning contingency written in. #2 the owners of the other lot in question don't know that the city is considering rezoning their vacant lot, I should put in an offer before they find out their lot is going up in value by $300,000 when/if the city rezones it. Thoughts or input anyone?

I met with the city today. It seems the zoning and bylaws of the town are not in line with what the community wants. It is zoned public which means only 2 things are allowed. The current options are either a single family home "that doesn't seem like a good public use to me," or a park "which would be about the most expensive 12,000 square foot park I've ever heard of." So my next step is to get the community together and change the laws of the town, "never thought I'd get into politics lol." The town meeting is on March 28th and this issue will be brought up for discussion at the end of the meeting. This could be a long process but I'm gonna spear head it.