All Forum Posts by: Hunter Harms

I have a question on a potential scenario I could find myself in in the future:

I'm looking to offer on an apartment repositioning deal that has come up in my pipeline and I'm analyzing the numbers to determine at what price to offer (Initial offer, not in due diligence phase yet). I have received all of the financials from the seller; Income vs. expenses, etc. I am looking to get a loan for both the acquisition and construction of this complex because it is a great value add deal, but I'm now a bit confused on how to analyze the numbers for this before placing an offer because I don't know the exact rates ill be getting on said loan. I have not applied for financing yet because I am only running rough numbers, so I don't have the interest rates, points, etc that I'll be getting charged and am unable to plug them into my numbers to determine my initial offer price. 

From what I've been reading I will be wanting to get a bridge loan for this type of project, is this correct?

What is the best way to go about getting these financing numbers to plug into my analysis when I have yet to get approved for financing? 

Is this a situation where you can be pre approved for financing so you can use the actual numbers in the pre offer analysis?

What are some great resources that cover the entire process of analyzing multifamily deals? I've been reading a lot of material and watching many videos on the topic, but I just want to see the process broken down over an actual deal and using real numbers. A lot of the videos just plug in estimated numbers and don't go over the process of actually finding the numbers to make a deal work. I am a visual learner and am just looking for something that shows this process being done!

Thanks BP!

I have been pulling some really great lists of motivated sellers of whom I will be sending direct mail. I am trying to identify sellers who have a higher level of motivation to sell than others by finding names and addresses that appear on multiple lists I have pulled. Is there a platform out there or a system I can use to identify these names that are on 2, 3, 4, or more of my different lists just by plugging in the names and addresses? I want to target sellers who appear for example on all 3 of the tax delinquent, absentee owner, and pre foreclosure lists I have pulled. Any advise? 

What is the best entity structure in regards to taxes for a fix and flip company handling 10+ active deals at once?

When it comes to the design process of rehabbing a property, what is your work flow for choosing finish materials? Of course you don't want to be the best or the worst property in the neighborhood, but once you see the necessary finish level of your comps, how do you go about choosing materials? I am going to be diving into my first deal later this year and am trying to figure out a great system for this part of the rehab. I know that after a lot of trial and error you build up a spec sheet of the materials you favor the most, but for someone like me just starting out, how should I go about this? What comes to mind first is finding some examples on Houzz or somewhere similar and then finding the materials used in that property on my own. I am a bit reserved though because I'm not sure what finish materials would look good with others, etc and I don't want my shortcomings in design eye to negatively effect my business. Obviously I will learn and gain the eye for this through rehabbing many properties, but what are some things I can do for my first few deals besides hiring a designer or partnering with someone who is good at it?

Still looking for a reply! :)

@Mel C. Do you just communicate your vision of the house to your architect and then have him communicate the specifics to the GC? Also, do you find a GC who can take an architects drawings and specifics and handle the entire rehab, or do you sub out?

When I am hiring a GC and sub contractors I would like to have a contract written up in order to keep all interests aligned and mitigate as many potential problems as possible. J Scott has uploaded a sample contract that involves a payment schedule, SOW, etc and I was just wondering if I could bring this to a real estate attorney and have them write up a contract using this template, but make it specific to me and my needs? Would they be able to take my specific requests and write it up into a contract that I could then use for all of my deals, just changing the specifics when needed? How much would this service cost and is it a normal thing to have done?

Thanks BP!

@Will G. Thanks for the response! That advice about volunteering with habitat for humanity is some of the best advice I think I've gotten on BP and I already am looking to volunteer! Also, I am going to be pursuing this as a career so I like the advice you gave me regarding doing the work myself. 

I recently heard of an entity structure being used by another flipper that piqued my interest and I need some BP feedback! The way he put it is that his main company is an S Corp and he creates an LLC for each active flip that is owned by his S Corp. After the project has been completed and sold he dissolves the LLC for that property and repeats the process. What are the advantages of doing this both in taxes and liability? Disadvantages?