All Forum Posts by: George Krajacic

Hi Henri,

I would suggest no to quit your job to do renovation. You are trading one job for another and at the same time maybe jeopardizing both jobs! Really, I cannot even make the statement I just made because I don’t know why you are considering doing that! So let make few assumptions, that might be complexly off base, but we must start somewhere. When I analyze the deal that I am considering flipping or renovating and holding, if there is not enough room to hire good general contractor to do complete renovation and still have an excellent deal, why do it? Go find a better deal. The money you would save by supervising renovation you would lose by not earning a paycheck on you regular job. If lack of sufficient funds is the issue I would find a partner or do the smaller project. Without complete picture of your situation this is the best I can do.

In any case, good luck to you whatever you decide to do.

George Krajacic

Find a Killer Deal!

There is plenty of money available, finding money is not a problem but finding a good deal is. My business did not slow down because of lack of fund but it did slow down because flippers are bringing deals with too thin profit margins. If I am not convinced that borrower will make a decent profit I will not lend. So again the secret is in a “Good Deal”. Also, when you present a deal to an investor or a lender make sure that it considers all important areas. I have “Flip Calculator” that you can download from my web page and use it as presentation tool.

Good luck,

George Krajacic

Hi Brian,

I am really impressed with a quality of advice you already received so I will address only the issues from HML prospective. Most likely you will not be able to get conventional financing because house is in disrepair. If you get a loan it will be commercial loan requiring 25% to 30% down payment. Closing conventional loan with all of you being in different states might became a nightmare. So as you already know HML is your best option. HML will also require about 25% down payment. They will also require proof of funds showing that you have enough funds to do the entire repairs, make required monthly payments and pay for closing cost. Most likely they will require detailed cost break down of all repairs. If none of you have any flipping experience then they might require larger down payment or licensed contractor bid for the repairs. Some HML will also provide controlled fix up funds. I am certain that you already did you analysis but you can also see the way lenders look at you project by going to my website and downloading a "FLIP CALCULATOR".

Good Luck,

George Krajacic

First, I would start attending every Real Estate Investment Meetings in Phoenix area. You can find them on internet. They usually have wonderful speakers on different investment strategies and you will meet many other people with same interest. In very short time you will be ready to start investing with confidence. I would also suggest to attend David Tilney class on Single Family Home management and Master Leasing. (www.DavidTilney.com) That class will put years ahead!!

Good luck,

George Krajacic

It would help to know more about your project:

1. At what stage of development are you?

2.Are all permits in place just waiting to be pulled?

3. Do you have complete loan package that includes the following:

§Description of the project

§Description of the area with study proving to the bank that your product would sell.

§ Complete cost break down with bid from licensed contractor.

 Prfit analysis.

§And on, and on, and on……….

One would need much more information to form an opinion why you are having a problem.

Good luck,

George Krajacic

I am located here in southern California and I am curious which cities are you considering for the project. If you can share that information I might have some suggestions.

George Krajacic

Hi Christine,

To do the deal you will need money partner. Assuming that you can get conventional financing at 5% you will still need $150,000 for down payment. If you have to get private money loan at 7% then you will need $265,000 for down payment. I did not take a time to completely analyze the deal but that should be done first. If I knew the size of the units and county that the property is in I could give you a better answer. By the way, I am next door in Buena Park so if you want to you can call me.

Good luck,

George Krajacic

I don't think that you are looking for software; you are looking for sale data in the area where you are considering buying a fixer. Easiest way is to work with real estate agent that can provide the data you need and even separate completely refurbished properties from fixers. If you want to do it yourself you can use Zillow or many other free services to determine what properties are selling for. Once you have that data, than you have to check condition of the properties yourself to determine if the prices are for fixed properties that you can use as ARV prices.

Good luck.

George Krajacic

Hi John,

The question is too difficult to answer without knowing much more about your situation. For one, which states are you considering, 2. how much investment funds are available, 3. Are you thinking of buying one house or 10 or more, 4. What is your real estate investment experience, and on and on and on. However, I am willing to spend some time on the phone with you and try to answer some of the questions.

Take care,

George Krajacic

To come out of your situation with most money in your pocket you first have to educate yourself.

First I would put a lock box on the property so that you or your relatives do not have be letting people in for inspections and doing estimates.

Second, I would establish as-is value and "After Repair Value" (ARV) by asking 4 or 5 real estate agents to give you both numbers.

Third, I would use “THEBLUEBOOK.COM” and get 4 to 5 suitable contractors to give you complete renovation bids.

Fourth, I would go to local Real Estate Investment Clubs (You can find them on internet) and talk to flippers. Many of them would be more than happy to provide repair funds and then split the profit with you. Again you would have to talk to 4 or 5 flippers and they would do their own estimate and tell you what they are willing to do and how the profit would be split.

Fifth, after you get all the proposals from the flippers than you call back all the contractors that gave a bid and ask them if they would be open to doing renovation with their funds and getting a portion of the profit on top of their bid. When the house is sold, first all the sale costs are deducted, then agreed repair cost is deducted and what is left is the profit.

Finally, how the profit is split depend on negotiation and on how extensive renovation was. It has to be win-win situation and the hardest thing will be to know when the people are trying to take advantage of you. That is why I suggested educating yourself and hopefully you come out with enough money to do this again and start having an income. You have an unbelievable opportunity make best out of it.

Also I would immediately start going to local investment clubs and really get to know investors and flippers. Remember you have valuable property! Almost anything that was built in nineties and has ARV of $270K is worth fixing.

Good Luck,

George Krajacic

p.s. When you narrow down to one or two potential partners I would check all their references and I would also check their credit(for credit check you have to have permission).