All Forum Posts by: Eric Keller

@Vince Mayor

Thank you!! I wake up every morning with a smile on my face

1. Yes. My mentor, also my hard money lender, helped me put all the pieces to the puzzle together. I had knowledge of how everything worked but he made sense of everything and put it into order. He helped me on the first 2 deals and then I caught on quick. I made it a priority to not call him unless I absolutely could not figure something out. In a way he was a safety net. We have developed a great relationship and are good friends now.

2.Financed all my deals through my lender. He is the only lender I use as he is a great mentor and friend.

3. The first house took me some time. 3 months but that was because I was learning and didn't know exactly what needed to be done and what my buyers wanted. Now I have it down to a science. A house takes me no longer than 3 weeks to rehab to get rent ready. Days to close. and about 2 weeks to find a buyer or less.

4. Biggest lesson learned is time management. My strategy is heavy on volume so keeping pace and knowing when to do things at the right time is essential.

BIggest mistake was not starting sooner. I was always interested in rei but never knew where or how to start. 

Best decision was to continue when I had many people doubt me. Many people thought I was crazy and were scared for me because they were uninformed. Proving them wrong through success is the best possible action.

Thanks

It has been a long time since i have been on Bigger Pockets and since I have started this thread. So, I figured I needed to update it.

My first rehab took 3 months and was a huge learning experience. I was profitable and knew I could make this my career.  

Since finishing my first rehab at the end of 2013 this is the birds eye view of what I have been going on in 14'

-Organized my business into an LLC and am recognized by state of Missouri as a business entity.

-My position at my day job was eliminated in July of 14' after I finished my 4th house. Best thing that happened. Could not keep from smiling while they were telling me they were letting me go. They couldn't figure it out why :)

-Finally did my first wholesale deal.

-My current strategy, as it has been from the start, is to provide cash flowing investment properties to cash buyers. I now also provide management to the investments that I sell as I know them inside and out. ONE STOP SHOP!!

For 2014 I have done 8 rehabs by myself. This includes finding the properties to buy, rehabbing them myself, placing the tenant, and finding/marketing the investment to cash buyers. House 8 is being finished in 10 days and will be buying 3 more before the year is over. Making a total of 11 houses!! My goal at the beginning of 2014 was 8 houses and it feels too good to know I am going to exceed it. It has been a crazy busy year and 2015 I will be doubling output at a minimum of 20 plus houses. I now have hired 2 guys for my rehabbing crew and will begin to build a management company beginning 2015 to sweeten the deal when you buy an investment from my business. My role in the business will be less focused on swinging the hammer to managing the crew and finding more houses and placing tenants. My first year in business has been great and plan to work even harder to make 2015 even better.

Hope this inspires would be investors and motivates them. 2 years ago I was fresh out of college and was washing cars for $9/hour desperately trying to find a "real job". I transitioned from that to a "real job" that I hated. Work it for a year to fund my first 3 rehabs and now run a successful real estate investing company that is growing every day. Do not let anything or anyone get in your way to success. Believe in yourself and work hard. In real estate the sky is the limit.

I really appreciate the concern. Makes investing a little bit easier. I do know that I will not make all that much on this flip in comparison but being my first one, I have to start some where so I can build my business.

Ill break it down into some categories

Roof- I plan to do this myself with some friends. Tear off and installation. Inspecting wood under shingles. New shingles and tar paper. Have done a few in the past. Hard work but will save me big.

Water lines to: faucets (2), toilet (1), tub (1), exterior spout (1) and to the water heater. Copper was stolen but the area where the lines are run is all exposed. Plumber friend is doing this.

New A coil in furnace. Was stolen. Friend who does HVAC is helping with that. Will need an A/C unit also. He is going to do all HVAC. Worst case scenario, which I have planned for, is all new HVAC. Fingers crossed!

Entire interior will need patch work and paint. Heavy smokers lived in the place before and the nicotine literally dripped down the walls. Killz oil base here I come!

Hard wood floors under carpets are in good shape. Some refinishing and poly to make it shine. Have a friend who installs carpet for a living and also does tile if I choose. Also have a friend who does hardwood flooring.

Kitchen cabinets will need some poly to shine, knobs (not sure why they stole all knobs) and flooring. Faucet and sink are fine. Overall decent.

Bath room needs vanity, sink, lights, tub reglazed, and surround. Floor will need tile and paint/patch the walls.

Exterior needs some touching up with paint, patching here and there. Windows need screens and cleaned. Sills painted.

Patch concrete steps in rear (still within code, not crumbling) and add hand railings on both sides. Front porch will need a hand railing and paint iron railings.

Front storm door needs replaced.

Electric is in good shape. Box is great but will need some minor work and I plan to replace all outlet and face plates

General yard clean up and addressing the small things to make it look nice.

Some things I may just sub out to save on time if the price and work will be right.

My philosophy when doing a project is "if its worth doing, its worth doing right" great grandma taught me that, she was in real estate also.

I do have my work cut out but I plan to work after my day job and on the weekends all day. My friends love cash so they will be helping most of the time.

Thanks for the support! I'll answers some of the questions that everybody has. It is a decent size rehab but the work is not anything that I have not done around my parents house or working for other contractors on summer breaks. I chose this home for that reason. If there is a surprise I have saved to create pile of cash to solve the problem. That was always present in my mind when I was looking for my first rehab. My HML was/is a rehabber turned lender.

Fred's questions-

1. I have factored my hard money costs. My HML does not do a credit check or application. He simply ask for the home in exchange for defaulting on his loan. He finances 90% of the deal with 10% as a down payment. 6% loan fee, 3% on the front, 3% on the back and he charges 1.5% interest payments per month for 6 months. Renewable at the 6 month mark if needed. Interest will be on the full amount.

4.Inspection was performed by HML for free. I walked the property by myself and then we walked the property together on a separate occasion. I compared what I thought needed to be done and he showed me what needed to be done. He will be checking in on me as I complete work to see progress. Does this with all his deals. Even will drive by and check the property when I am not working for peace of mind. I can call him day or night if I do not know how to do something and he will come over and help.

5. I will be doing all work except HVAC and Plumbing. I have a friend who is onboard for HVAC ( how he earns his living) and a friend that is a plumber( how he earns his living) to complete these task. The friend discount helps.

6 & 7. I estimate the rehab to take 2 months. I also have friend willing to help that have more expertise that I do to complete the work. My full time job will be a burden for now but it is how I am funding the first few rehabs until I have a big pile of cash. When I am comfortable with an amount I have set I plan to invest full time and quit my day job.

I have taken J's thoughts into consideration many times. However, my coach/ HML has been doing this since 2007 and has flipped over 80 homes. He genuinely wants to help people who are motivated and not BS'ers. He understands that I want to succeed and have the drive to do it but limited funding right now. I know that most people will think its a setup to purchase his property, with his funding and he then just takes off and has sold me a wreck. Not the case. He is a respected investor in the St. Louis area and has many people to back up that opinion.

The house is in 63136 zip code

Will keep you posted.

Thanks

Hello BP,

My name is Eric and I am from St. Louis, MO. I have been lurking on BP for about 3 months now and wanted to share my story.

Graduated college a year ago and found myself working crappy jobs after being "promised" that I would find a great job in my degree field. Yah ok... (took me a whole year to find a job for what I went to school for) While working these crappy jobs I became interested in real estate investing. I had given it a thought some time ago but really had no clue on how to begin or thought that I needed a pile of cash to get into the game. So, the final crap job was a position I found on Craigslist that took scrap building materials from new home sites and took them to the dump. Coincidence? Maybe but thats when I really got serious about real estate.

Thats about the time I found Bigger Pockets. So much knowledge in one place. Basically taught me everything I needed to know and I have been building off of it since. After I read for about 3 months straight I joined a REI club. Met a lot of people who are willing to help me and answer questions. My next step was to try to get in to investing with little or no cash. Sound familiar? Yes whole sale.

Bought 100 bandit sign and the phone would not stop ringing. All kinds of calls from "will you buy my 100k house" to "help me get out of my current mortgage". Over whelming to say the least for someone who has not done this before. But I did not give up. Field all calls, went to look at properties, and finally got one under contract in 3 weeks of trying. Man I felt great!! So, put it under contract and within 2 weeks I had a buyer. We walked the property and negotiated a price and took it to the title company. Could not believe it! I am going to make money at this. Well long story short huge fail. Received a call from my title company and said the owner of the house has 2 judgements and 60k in mortgages against the house. DAMN! wind out of my sales and dropped hard. Owner lied straight to me and my buyer.

BUT I am not a quitter! So I pressed on and put another one under contract. Free and clear this time but I could not negotiate a low enough price to get a good spread on it. Now, I am thinking I just wasted a lot of time and money for nothing. Almost gave up at this point but started to think about my skill set. I have ben doing all kinds of contracting and construction jobs growing up. Im 26. Plus the 8 million "projects" I did/do with my dad around the house regularly got me thinking.

I can do a rehab!

So fast forward to today. After a lot more reading, searching for the perfect 1st property, and picking up a coach of sorts, which happens to be my hard money lender, I am closing on my first rehab 8/26/13! I am pumped! 3 bed room 1 bath about 1,100 sq ft. With my numbers I estimate that I will take home about $8,000 profit. Its not a full gut to the studs but does need work. I am planning to buy, fix, and sell as my end game.

To keep BP in the loop, I will update with my progress and final numbers of what shakes out as I go a long.

Wish me luck!! and thanks for the education BP

Hey BP I have, what I think to be my first and second deal as an investor. I will break them down as follows;

First deal: whole sale

Seller is wanting to move quick. He has owned the home for 8 years and it is free and clear. It has a new hot water heater, roof is good, exterior is in decent shape. Interior needs some polishing but not too bad. Also needs a furnace. There is a section of the basement roof that has mold growing (8x3 ft) from a leaking toilet. ( no sewage)

He was asking 16k and I got him down to 9k. I estimate that repairs will be in the 4k range. Recent comps are in the 40 to45k range I have a good buyers list. If you think this could work what should my asking price be?

Deal 2: flip

Seller is slowing getting out of the business and has started the flip but has chosen to sell instead. He has it priced at 9k. This property will need around 5k to be finished and comps are in the 40k range. It will need a hot water heater and a furnace with duct work. He has almost all the pieces ready to go they just have to be installed. Good roof, electric that has been inspected and plumbing. I can do all the remaining work except furnace. He has done 12 houses in the neighborhood and offered to help me out in anyway.

Let me know what you think.

Thanks.

Thanks Dev! Thats what I though also, but being new to the biz I did not want to miss lead anyone.

Thanks for the warm welcome everyone!

I do have a question, I have a hard money lender ready to go and I am just looking for the right property to wholesale. I put out some bandit signs that say" I buy homes cash" with my contact number. I know HM is different than cash and I think I should have wrote "I buy homes instead"

Anyone think it makes a difference? I don't have a surplus of cash yet and want to be honest because your reputation takes you far in this biz.