All Forum Posts by: Hannah Simpson

Quote from @Hannah Simpson:

 @Tchaka Owen Hey! Saw this old post since I am wondering the same thing as Lee was. Are you able to recommend to me which company you referenced? Or have another one you now use today?

Hi Hannah,
Yes, that company is still going strong and I even use them for our vehicles. Here's the problem (for you): they're Florida-based and you appear to be in Texas. Lee is literally across the river from me in Cocoa. I can ask if they have a referral, however I have a feeling you'd do better by asking local investors. Or perhaps you're doing a deal in Florida?

Tchaka

Quote from @Hannah Simpson:

 @Tchaka Owen

@Lee Hughes - what @Brian Pulaski said. 

All you did is a small fire to burn your structure partway and your flip is suddenly your pit. Also, you need a policy for your property, not your LLC (yes, i'm intentionally being picky). If you need a quote, I can recommend a company for you. I've used them numerous time over the past 8 years.

Thanks for the input John. I found a recommendation on another thread for REIguard.com. I have called them and am setting up a quote. We will see what it looks like.  

Just to take a step back and not focus on the financing - how and why did you pick this market?  And if you don't know any contractors and don't have funding approval, how would you even offer?  Happy to help just not sure where in the process you are.

Hannah - I agree with the "start a little closer to home" sentiment. I am at my projects almost every day to see what's going on and I know and trust my contractors as I have been doing this for 12 years. You won't believe the "mistakes" that can happen even when you miss a couple of days. Un-doing stuff is expensive. The mega-flippers here will say that you should leave it to the GC (not in OK apparently) and be spending your time looking for the next deal. I understand that but I think you will have your hands full with your first one. Managing from a distance can come later. My 2c.

I also recommend starting as close to home as possible. It may help to have “eyes on” first and mitigate some risks.

I wish you all the best.

Quote from @Hannah Simpson:

Quote from @Rhett Tullis:

Just be aware you will not find any GC's in Oklahoma.  They do not license them here.  Lots of folks do the role but it is not regulated by the state in any way.

 Hi @Rhett Tullis! I have recently come to realize this! I think this is part of my problem of not understanding why I could not find anyone to work with. Is there a different "name" that they would go by? When I call and speak to realtors, lenders, banks in the area and ask for GC's they act like they don't know what I am talking about. Maybe it's a matter of different lingo...?

 Not really another name for it,  generally just look for a contractor or vendor that does a bit of everything.  In the PM industry we refer to it as a "Make Ready" but lots of contractors out there that can help you but hard to find a good one for sure.  Relationship and trust is key!

Quote from @Hannah Simpson:

Quote from @Ethan Gidcumb:

Hey Hannah! As a hard money lender, this is how we could handle situations:

Provide a borrower with a pre-approval, just as Justin had mentioned. When you find a property that you are in contract on, or want to check how much the total loan will come out to; we will ask for the Purchase Price, Rehab amount (This can be a rough estimate but will eventually have to be consulted by a GC), After Repair Value, and Exit Strategy. 

After gathering some preliminary information about the property and yourself (such as FICO and experience), we are able to provide a quote! Assuming that the deal looks good and the quote checks all of your boxes, we will order an appraisal, collect documents, and start getting all other processes in order to close. 

As Riley had mentioned, getting a loan conventionally can take quite a while, which is why some investors prefer (or require) a hard money lender to help on the financing side. Hopefully, some insight on the process helps your understanding. It seems the area in which hard money could help you is in the qualification process since there are fewer, "checks", to get the ball rolling.

Some investors I talk to already have a favorite GC they decide to work with, so maybe, it would benefit you to find a GC that you'd like to work with so you can move faster in the earlier stages if you find yourself in a similar scenario.

 Hi @Ethan Gidcumb! Thank you! Just to make sure I am understanding. The pre-approval then would be from a bank and thus I would have 2 loans; one with the bank and one with the hard money lender?

 Hey @Hannah Simpson, you actually have the option to get a pre-approval from both! Whether it's with a hard money lender, or with a bank. That being said, you have two different options when choosing a lender at this point.

On one hand, you have a bank that will provide a cheaper loan; although, the bank has more requirements and takes longer to lend on a property.

While on the other hand, you could go with a hard money lender who will be more expensive; but, you can get into a property faster and with fewer requirements. 

If you go the hard money route and plan to hold the property for a long time, you should refinance the property, once it is stabilized, into a better rate to put more cash back in your pocket. Hard money lenders such as myself have options for this; but, depending on your situation, you can usually get better rates with a bank. 

Let me know if I am unclear on anything I mentioned or can help further!

Hi @Hannah Simpson. Great question! This is some of the technicals that are not always discussed on the motivational podcasts. The answer to your question as a first time investor would be to try and find an "investment savy/friendly" realtor. They will be able to benchmark rehab costs for you, take a look at the property, do some basic, rough, back-of-the-knapkin underwriting (this house will need $40k, is selling for $200k and will be worth $300 afterwards). 

An investment friendly agent will also understand this process and be able to help you navigate this as a first timer. 

Here's how the pro's do it. Find a lead (on or off market), get photos and/or videos of the property, if they are local they or someone they know will walk the property to get a rehab estimate, if not they use those photos to estimate rehab costs using their knowledge of local rehab costs (varies greatly depending on skill, experience, and relationships; find another local investor to provide a rehab cost sheet), put the property under contract at their desired price with an inspection period (pros can waive this as they are providing their own rehab bid on the walkthrough, not waiting on a 3rd party), get the GC(s) out to the property during the inspection period to verify assumptions, and then re-negotiate or close. 

Hope that helps and good luck!