All Forum Posts by: Javier D.

Hey Daniel,

a lot of good advice here. Here are my 2 cents. 

Aside from an investor my day job is being a contractor for FNMA and Wells Fargo. Contact a local agent in the area you are working who specializes in foreclosure sales. Ask them if they have a good contractor they work with on their REO rehab jobs. Us as reo contractors specialize in empty properties and rehab them to bring them up to market value so the bank can sell it off. My clients ask me to take before and after pictures to document the work in order to get paid. Try to get 2-3 bids and get a specific scope of work so you don't get hit with change orders on the work. REO contractors are usually below retail as far as costs go because we like to go in and out and are not set up to go tile shopping with you , pick colors blah blah blah etc. Some of us like me don't deal with public investors but you should be able to find someone with good referrals. Try looking for an approved SAM vendor (fannie mae vendor ) good luck bud. P.S. I do not work with investors nor am I asking for work on here.

P.S. I've done this on out of city flips and its worked out just make sure they are willing to abide by fannie mae guidelines. REO contractors have to provide photos of repairs before and after as documentation to get paid so its a nice extra if your property isn't local or even if its local and you don't feel like driving to it so much.

Hi Guys,

I'm a real estate investor in Miami and also a contractor. I've dealt with other investors before and frankly hate it nor do I want to deal with them but here is my suggestion:

Contact a local Foreclosure specialist agent and ask them who their REO contractor is. Us as reo contractors specialize in fixing up foreclosures for banks and hedge funds. We pretty much only deal in 1-4 unit properties. I pretty much know what to recommend to the client by just seeing the property. if its low income I know to bid on basic cabinets/laminate countertops, low end tile, white appliances etc. Do they want move in ready? patch job? just by telling me i can get them a price and no unnecessary additional repairs. Higher end properties 18x18 tile, wood cabinets/granite and so on. Just my 2 cents. Please take care of your vendors. If you want a great contractor whos the cheapest and fastest and you want to nickel and dime them and expect them to work with you good luck. I can't tell you how many times I've done bids as favors for my clients for their investors who are aggressive and negotiate without even knowing what they're talking about. Try to get yourself the Fannie Mae price guideline online and figure 10-20% on top of that as a great price. Those prices are for when they give us 10-20 properties to repair a month so don't expect those prices. good baseline though. Good luck my fellow investors!

Investor and contractor  here in SW Miami. New to BP.

I'll take all the advice here. Thank you all  . I have a similar post that didn't get any action so far(except its really me :) lol. Kind of annoying you would trick people though. You are asking for their experience and education while insulting their  intelligence by misleading so it is pretty offensive. I know you didn't mean it that way though. good luck to you and your client. let me know what he decides. i'd like to know. Thank you all for your 2 cents.

Good morning BP and thank you for stopping by. My name is Javier and I've lost my way deciding how to approach my short term/long term goals. I've been investing (Flipping,tax deeds,wholesale,buy and hold) for about 8 years now. 

My current portfolio is as follows:

12 SFR (3/2,4/2) in lower middle income neighborhoods not leveraged getting about 12% IRR

4 Duplexes(2/1s) leveraged with 25% down getting about 17% IRR (mortgages on the two lots with 2 duplexes on each lot @5.25% rate) no escrow.

All purchased at 10%-15% cap rate( i analyze deals as a flip) bought the houses between 80-150k and are all worth about 200-225k now. duplexes bought at 145k each worth about 175k-185k each. so there is some meat.

I own my primary residence free and clear as well as my office/warehouse where i work out of. These are valued around 550k for the house and 200k for the warehouse (bought house for 275k in 2011, warehouse for 180k in 2014)

I also have two flips in process one about to close for 300k (bought for 170k +45k in repairs.

I have another flip in process in West florida  with a partner purchased at 370k +125k in repairs on market for 599k.

I got into the business doing flips and have completed quite a few of them. I was very lucky in 2011-2014 and grew my construction business fixing hosues for banks during the crash.

So one of my issues is over the past few months I've battled leveraging some of those SFR rentals to keep growing my portfolio. My mentors here in Miami have told me to not overleverage myself in case acts of god occur (another crash, etc.)I've paid off my house due to emotional reasons. My wife doesn't work and peace of mind is very important to me(I have a 2 year old daughter and a son on the way :) . I live a very healthy lifestyle and also financially provide for some family members(health issues).

I own the rentals in LLCs (3-4 in each). Office/warehouse in another LLC and my primary residence under my wife and I's name.

Rentals only:

Operating income: 297,970

-Operating expenses : 78,471

NOI: 219,499.00

-Mtg payments(duplexes) -28,825

-Improvements - 5000.00

operating expenses include : 8% vancancy rate (much higher than the area), 1000.00 repairs each property per year, management fees of 8%, taxes and insurance.

Cash flow: $185,000

I hope i painted a good picture of where I am at and the way i assess deals, etc. so my concerns are as follows:

My goals have been to have enough passive income to not every worry about money. I feel I am on the way there (very close as my expenses currently stand). I see the market at an all time high and I never, ever ever speculate on property values going up nor do i count on this for my deals. I look at it as a gift whenever it's happened to me on a flip, etc.

I've contemplated leveraging and getting into a larger multifamily apartment building but in my area its hard to find anything over a 6% cap unless its in a really bad neighborhood. I like to stick to C or better properties (starter homes, decent schools,  no crack being sold out of my rentals, etc.)

I've analyzed commercial warehouse districts and again the rentals i have are by far a better deal as far as IRR go. I know i dont want to get into AirBnB or anything like that which requires a lot of time invested.

I drove up to jacksonville to look at some properties there but im hesitant to buy out of a drivable distance. I didn't really see any home runs when i've investigated that market but i haven't really looked much.) I've purchased in other parts of florida but only flips. Im open to leaving my comfort area if the cash flow is there but its 1 of 10 options i can't pull the trigger on. 

Im running low on cash and would like to have some for flips/opportunities  when they come. My construction business as come to a screeching halt(i fix reo properties for hedge funds, banks) and it was a scary experience. I went from having 45 employees to 0 in a matter of a few months which made me decide to focus on this passive income more.  . Im looking in so many directions that im making my head spin. I feel the market is a little overpriced but everything looks good as far as P/E ratio in stock market, healthy employment, etc so I'm comfortable still buying(again buying good with some equity in case i want to dump). My friends here have told me just to sit back but I think im too aggressive to do just sit on my hands. 

My original goal was to make 500k a year in passive income. Im sticking to it for now but there are so many avenues i was hoping someone has been in my shoes and could offer their experience. I know my income now is great especially at my age and im very grateful for the opportunities I've gotten and all the people in my life that have mentored me in this process. I hope i can keep learning and maybe teach/help  others along the way.

I just had my coffee so i hope i didn't make you read too much!