All Forum Posts by: Fatima Champagne

Is is a rent controlled building? I have seen people waaaaaay overpay when purchasing rent controlled units, not understanding that they can't just jack up rents to whatever they want. Then I'll see them listed again after the owner wasted a year bleeding cash. From my perspective, rent control is the number one thing to consider.

I prefer to buy completely beat up, vacant multifamilies. We've actually been fortunate to buy two previously owner-occupied MFRs, so they vacated when we purchased. Personally, I have some moral qualms with flippantly kicking people out of their home so I can make a quick buck.

 Congratulations on locating a promising deal.  First and foremost, in my view, you need a good idea of how much and what type of work is needed in the place.  I highly recommend looking yourself and at least bring someone who has some sort of paid contractor work experience.  Track down some of the comps that have sold in the area to see how close and similar they are to your subject property.  If the numbers work out as you stated at worse you can partner with someone and receive an equity stake in the deal or receive a flat fee payout and some mentoring/coaching if they are experienced in the field.  All the best.

You bring value people come to you. It does not matter what kinds of value. Often one partner brings the money/credit and another is a contractor. Maybe a third partner brings the properties cheap. If you have done some sorta business venture outside of real estate with someone such people  often make good partners. You know who your getting in bed with. Sit down and figure out where your value added is and what kind of partner would compliment that. 

As for rehab costs. 

J. scott's book on running rehab numbers is decent. Basically you see the home as a set of main systems (plumbing, hvac, roof, electrical, even drywall), finish levels (how high end will you go on each system) and fixtures - pay close attention to little stuff like faucets on the fixtures. It adds up if you buy retail. J. Scott's book helps but it's all experience and not finding a major surprise behind a wall, like a ruptured main line or something. 

Final piece of advise, leverage any small tight nit community you happen to be a member of. Be that family, church or a book club you have been a member of for 20 years. 

PS get some negotiation skills asap

And run the numbers on a deal 5 times before buying. 

I'd be careful about purchasing a property without having a much more in-depth analysis than this. As said above, always stay away from Zillow for any type of estimate. When finding comps make sure that your comps are within a few blocks (Philly is very block by block specific), within 20% of your finished square footage, similar bed/bath count, and also a rehabbed property. If the seller says it needs about 50 that may cut it to get it rental ready but to hit comps close to or in the 4s I would imagine it needs much more, you need to factor in the basement (does it need dug or finished), do you need central AC added, Id imagine comps in the 4s have both of these things, also have a contractor check out the mechanics and overall structure, it can be hard for even a seasoned investor to come up with the right rental estimate. 

I would get a team set up to make these decisions, a contractor and a lender. So that way once the right property comes up you have the right team in place to make a move. 

This is a great question lol! You need to find someone who trusts and believes in you. That's a major key because unless you have a lot of deals under your belt and have some respect in the REI community it's going to be difficult to attract private money. When you have a portfolio that speaks for itself these individuals will be blowing your phone to partner with you.

But to answer your question, you need to build relationships and put yourself out there. Real Estate needs to be a profound passion of yours to the fact that everyone you meet will know that you're a real estate investor. Your involvement in Real Estate has to be known to everyone you know, or meet(if you want to attract partners or private money). The reason why is because you need a relationship with private money lenders before asking for a partnership on a deal because not everyone will just give $189k. I suggest you go to your REIA meeting, and local sheriff sales and start networking with these guys and telling them how you're an investor as well and you'd like to meet up for a coffee to discuss more on what you guys could do to help each other. BELIEVE ME! These conversations and meet ups with these guys over coffee could turn from you learning different techniques to them offering to partner with you without you even asking them! It's vital to be completely honest, and transparent with these guys so they feel they have a genuine relationship being built, and not someone just asking for money.