All Forum Posts by: James Dainard

 If I was going into a city and trying to transform a number of blocks I would start with path of progress and work my way out. The first neighborhood I would look at is anything next to infrastructure - if it has grocery stores, malls, gas stations. Because even in a blighted neighborhood, there's still infrastructure there. So I would start closest to infrastructure and work my way back.

I would also pay attention to crime statistics and try to go for the least amount of crime relative to the area

Yes, I love a BRRRR! When we first look at a BRRRR or Flip we look at if the property can pay for itself completely, and if it can we will hold it as a BRRRR. After 1yr we run a return on equity calculation, how much is our monthly cash flow divided by our equity position. If it's below 7% then we sell the property being taxed as a long-term investment or 1031 it into a larger BRRRR.

 All of the finishings that we use can be found at our ProjectRE amazon page https://www.amazon.com/shop/jdainflips?ref_=cm_sw_r_mwn_aips...

 So I've never used the 70% rule to buy a house. I've used it as a reference point, the reason being is that the 70% rule doesn't cover the amount of time it could take.

How we buy properties is what is our cash on cash return? How much cash do we put into the property with our down payment and holding costs, and how much are we getting back in profit? We look for a 35% return in 6 months rather than the 70% rule

 In all 4000 of the flips we have worked on, we have always made effort in landscaping. The last thing we want to do is make the house not pop from the street when we spent a lot of money on the inside, it's really the cherry on top.

We use comps to decide how much to spend on the landscaping and how to style the landscape. If comps have hardscaping like paver patios and decks, then we instal those to give the same feeling. If not then we go with a really clean look of fresh beds, and grass that will really pop out. 

Because we're flippers we can't afford a landscape designer so we go with the style of the home, look at google images based on what kinds of landscaping go with that type of property and then we draw a map of where we want the beds and grasses to go. We make the design but we let our landscapers choose the actual types of plants based on season and cost. 

1. Construction loan through a hard money lender - where your purchase price and rehab budget are factored into the loan, this will give you the highest cash on cash return

2. Commercial bank or local business bank - where they will fund as much of the purchase price and rehab budget as possible, typically will have a lower interest rate than option 1

3. For a live-and-flip - take out a 3% down FHA loan that way you can keep your cash to pay for the renovations

4. Private financing where an investor can get a loan from an individual rather than a conventional loan because you can get more leverage and have more room to negotiate

 Hey Lisa!

You want to check the zoning of the lot. That's going to give you the best idea of what the land value is.

If you're in Seattle it'll likely be SFR, LR, or RSL zoning. You mentioned they're building townhouses nearby which makes me think that you might be in an LR area.

You can check the Seattle zoning code here.

You can check the newly built comps in the area and use 1/4-1/3 of their value to approximate land value. This is a very general rule of thumb and you should be using comps to help guide your decision.

I hope that helps! Let me know if you've got any other questions!

You'll have many mentors along your journey. Meetups are a great place to start. Attend in-person ones near you when you can to network and listen to other people's experiences.

Ask around while you're there to see if you can be of any use to the people in the room. Start with small tasks that you're good at. Take down people's contact information and follow up with them for a meeting that same week.

The more you ask around the more you'll learn and the more connected you'll get.

Add value everywhere you can!

 It's typically easier to manage a property that's close to you so you can drive to check on your project if anything happens.

Like @Bjorn Ahlblad said, most people typically end up making more money investing in state as opposed to out-of-state. The small efficiencies you get by being close to your project add up. Also if you're investing out of state and get hit with an unexpected cap ex it's going to wipe your cashflow for quite some time.

If you have people you trust and can rely on in other states that will help you manage and run your assets you stand a better chance of getting yourself a well-performing asset.

Whatever you do, make sure you pad your proforma by adding in contingencies to your budget and by increasing your projected hold times. We're adding in 10-15% on top of our budgets and adding 30-45 days to our proformas for sale times.

Hey Dustin,

Right now, you want to be reaching out to everyone you can to see if you can get a better rate or some more attractive terms.

You don't want preapprovals from every lender, you really only want a full preapproval from the lender that you choose to work with through the process. Getting multiple preapprovals will impact your credit score if they aren't within a 2-week timespan. Make sure you plan accordingly when you've picked a lender. Another thing that's helpful is getting fully underwritten and preapproved. This will make it so that you can get through your contract period faster if that's something you want.

Questions you might consider asking a lender:

How long have you been in lending?

What's your current loan volume?

How can I expect to communicate with you / how frequently will you contact me?

What rate do you suspect you'll be able to lock me in at if I'm looking to close on a property in the next 90days?

Does your company offer any portfolio loans, 2-1, or 3-2-1 buydowns?

Do you offer any lender credits towards closing costs?

Do you own any investment properties?

Have you helped other investors with the type of investment that I'm looking to purchase?

Hope that helps!

Bonus: ask your agents and network for recommendations on lender, who they like working with and why!