All Forum Posts by: Evan Roberts

@Account Closed sorry to come back to an old thread but as a rehabber whose now coming across more leads that are better suited to wholesaling, I’m interested in your reserve auction idea. Do you often host auctions where you are representing an individual who only has control of the real estate via contract as opposed to being the actual owner?

 $150mil on 1000 houses puts you at 150k per rehabbed house in the hood. If you’re taking deals like that on your books I’ve got a portfolio to sell you and probably a bridge!

Anurag, without looking at a specific property I can't really comment on the exact financials of the deal but many times the HOA can make a decent condo a tough rental to cash-flow on. What are rents going for around the areas you've been looking at?

@Casity Kao I'm not certain what labor costs are where you live, but $45k isn't massive where I'm from. A full reno is typically 2-3 months ($60-90K around here depending on the size and scope). 

@Oliver Sparks that property isn't going to sit around for you to get a LOC extended nor for you to sell your house. I would look at hard money if the deal has the meat on the bone to support the expenses. Real estate is about leverage, in this case you are leveraging someone elses capital to make you more money. It would require you to come up with SOME money, but there are HML out there funding 90%+ of a deal. If that property is still sitting there when you're done selling yours then it isn't a good deal and has been passed on by numerous investors at that point.

Anthony, 

Fellow MD investor here. As required...I'm no CPA nor Lawyer BUT I'd really think about doing an LLC. Helps you shed liability should something go on later down the line and also, given the new tax plan that we are going to be working under (and depending on your tax bracket) a pass-through entity like an S-corp could mean big savings for you. We purchase all of our properties with commercial financing where applicable (or purchase cash and refinance into a loan under our LLC) and typically have no issues as long as your W2 income can support the loan as a guarantor. Feel free to connect and we can talk more about getting you started.

Thanks

Sorry man but that deal doesn’t make anywhere near that profit when you factor in transaction costs. If you think it will be $40k or even close to reno just walk away right now. In addition to the other costs laid out by @Nghi Le above, you need some buffer on your reno budget for the suprises and also set aside some money for lender/Buyer repairs post-inspection. Don’t fall into the HGTV method of calculating profit. 

I see no reason in the world to take on the liability of being your own broker. I keep my license with a broker here locally for $50 a month and $395 a transaction for an admin fee. This is a fairly common model I believe and is best suited for agents that don't need any support (which it sounds like you would fit that bill). You would likely pay more in liability insurance than you'd save with that few transactions per year....

Yeah I have to echo Ozzy's perspective. Your projections for money spent renovating are very low and will likely yeild a mediocre product which has the snowball effect of getting a mediocre tenant and so begins the downfall of many investors. We always do essentially a full renovation so that we're not inheriting unknown deferred maintenance and also can create a home that someone wants to take care of long term. It also allows us to push ARV on our refinance appraisals, which has been very beneficial for eliminating the need the leave in tremendous amounts of cash in a property (sometimes can get out with leaving no cash in depending on terms available to you).

Sarah, If you'd like to come see a full renovation of a Baltimore rowhome reach out to me. I"m working through another one we'll be adding to the portfolio and doing it entirely from scratch (new plumbing, electrical, HVAC, etc). Always happy to meet new investors and help where we can. 

Costs to build are likely much higher in MD than Texas, but you're right about transportation costs being a factor. The thing to weigh against that is also the reduced risk....this company is producing a custom product without the need for any subs until the point of roofing, siding and finish work. The turn around time is also considerably faster. Check out their product...

http://www.blueprint-robotics.com/video/