All Forum Posts by: Jeff Blanchard

Try to get even a baseline of credit going if you can, and even just $10k in the bank -- meanwhile cultivate 1 or 2 other friends to do the same, whom you trust. Find a distressed multifamily; get an FHA loan on it. Check out HomePath or other government programs that encourage investment in less-developed areas. Write a modest business plan that shows you understand the development process and take it with you when you visit lenders.

Combining these and some other creative ideas, you and your partners can start at ground zero and work your way up. Get your hands dirty while you're young and don't have as many commitments. By the time you're tired of having dirty hands, hopefully you've seen some growth and can start to afford to hire people to work with you.

And keep track of everything, even if it's just in a bunch of Google Spreadsheets. Even better, use property management software to help you develop and stick with a process.

Good luck

I do not use Buildium, but it's pretty decent from a cost/feature perspective.

I care less about financials than I do process, however; ease of use & presentation is also important to me.

Sounds doable. Another way to structure it is that he's providing capital, you're providing labor. You don't need to have money in the game necessarily, if it he has plenty of capital and only suffering opportunity cost by carrying the note -- you're also suffering an opportunity cost via your time spend.

So you'll end up putting a lot more time into this than he will. Does that time need to logged? Yes, for the sake of fair play. However, this could easily be structured as a strategic partnership -- his funds, your time -- and in the end he gets back everything he put in plus an agreed sum, and you split the difference.

From a rehabber's perspective, the 30's-50's are when the some of the good older practices of construction were still in use (ie, "overbuilt"), but the materials were much more consistent than in the late 19th and early 10th century.

I have a coach house that was built in the 40's behind a 1880-built brick home; the latter is very solid, but the brick isn't nearly as strong as the '40's structure. The coach house is rock solid, with little degradation or signs of settling.

In my opinion, it doesn't matter when the building was built as it concerns renovation: you're still using the most-recent, up-to-code solutions in the job. But mid-century buildings are a nice compromise between strength & "character" (which I really think helps sell leases).

Older buildings have a higher possibility of deferred maintenance, of course, but it's really the maintenance or lack thereof, not so much the age, that makes the difference.

I've had good luck with bamboo flooring. It's quite hardy, one of the cheapest "real" "hardwood" options, and also is resistant to water damage.

Avoid Pergo or composite laminates; they break down when wet.

Buildium is a bargain; but there's a better one...

A friend of mine is a (now retired) master home inspector, and he was instrumental in helping me make good decisions about acquiring distressed properties when I started out.

Pros: The structural/mechanical knowledge a home inspector has is very valuable, and could translate well in a GC role when doing rehabs. And of course you can hire out your services for properties that you're not interested in.

Cons: the licensing and insurance costs are not cheap. That's what ultimately brought my friend to retire early.

So my primary holdings are historic, multi-use properties in Louisville (KY). My partners & I bought these buildings in a state of high distress at low prices, and have been continuously & incrementally improving them over the last 8 years. We have great credit, reliable mortgage payments -- our interest rates are just too high in the present market.

Because these are long-term investments, we've never pulled a profit on our buildings. In fact, we contribute each month to capital improvements. Rental income is good now and the assets are solid (tremendously better than when purchased), but our debt-service coverage ratio is too low for underwriting of the banks we've dealt with trying to refinance. Of course, lower payments would only improve our cashflow, but this logic seems irrelevant to a loan officer.

Any suggestions?

This is how I operate. Are you planning on training him on such a setup, or are you taking over/assisting with management?

The poly-based (oil) paint lasts much longer than the water-based. Also you can blend it with clear polyurethane if your floors are a "little rough" but not so much to warrant full opaqueness; that way a little grain shows through, which gives it a little nicer appearance (in my opinion).