All Forum Posts by: Jordan Rhoads

@Michinori Kaneko and @Dave DeMarinis. Thanks for the advice! I hadn't thought about the HELOC affecting my credit score. Starting out I feel I'd rather do very small deals if possible so I could have the reserves and I wouldn't have to max out my HELOC. But even then I'll definitely be more cautious and talk to lenders about my exit strategy before I leap into a deal. I'll still look into Kansas City but I'm also going to check out Cleveland and Dayton Ohio because of their lower prices.

Update: since this post I've gravitated toward Kansas City and have already made many connections through BP and have an idea of which zip codes I'd like to invest in. I'm learning more every day and getting a lot of opposition and support (which I value equally). Every day I feel a little more confident than the day before as I meet more people and learn more about the market. Considering partnering as well. I made an offer yesterday on a below market turnkey property which I think would be a good start. We'll see if I get it but I'm still looking to start my first BRRRR.

Great information @Lee Ripma. It makes sense that you'd need to make sure they're providing the quality you expect. I believe I've heard of some PM's who were willing to check up on a rehab every once and a while but probably not every day. But my general feeling is it'd be best to have a partner in the area but if I didn't I could try and ask (or even pay) the PM or someone else to inspect the progress of the rehab every once in a while. I do realize that no matter what you do, a rehab probably won't go completely according to plan. Especially with my first deal. Haha. But I suppose that's why we need amazing deals to account for inevitable hiccups that will happen. 

@Sam Hickey, Thanks for your input. I'm learning so much from this post! BP is freaking amazing. The deadline would be decided by the contractor and he'd have to estimate the deadline and leave room for things to go wrong. And yes, the final deadline would need to be conservative but if you're interviewing many contractors I'm sure you'd get an idea of who's time frame is out of wack. You made some good points about possible sloppier work and checking the contractor's references. David Greene has a great filtering process where you start with 10-15 contractors and at least one is bound to go with these requirements and deadlines. Also I'd probably buy the materials (at least the finish materials) myself to help prevent delays and being overcharged. That is a good debate though, do you allow delays for better deals on materials? That's worth another forum post. 

@Lee Ripma, even if they contractually had a 5% decrease in pay for every week over the deadline and a 5% increase in pay if completed on time? What kind of oversight are we talking? Someone physically has to be there barking at them or would a video or pictures and a conversation every day be doable? 

@Colleen Weldin, that's very encouraging. Thank you. Did you end up using a partner who lived in Missouri? The way I was planning on managing the contractor was to have a reward in the contract (2-5%) if he finished on time and a penalty for each week he goes over. This of course would be an agreed upon and very conservative time frame. This is what David Greene suggests in his books. I'd also require them contractually to provide photos or videos each day if requested. Do you think doing it this way would help? Also that's great advice to advertise it as coming soon. I'm hoping if we were to rent it out that the PM would know to do that. 

Thanks for your input guys. This is why I'm posting it here because I want to validate or disprove my ideas. I'm learning a lot from these forums and I really appreciate the feedback. My idea was that I would provide the deal, manage the rehab, setup the project management and refinance. I'd do all of this as outlined in David Green's long distance REI book which to me seems doable. I just wanted a partner to make sure I didn't do anything foolish and I'd do all the work. Do you think experienced investors still wouldn't be interested? I'm guessing it might be a hard sell if they haven't looked into out of state investing themselves which is probably the vast majority right?

Thanks @Alex Olson. That's good advice. I am now planning on going in little better area and hoping to partner with someone more experienced if it's a larger rehab. If it's a simple one and I can afford it, I probably would take it on myself. Depends on which type of deal pops up first. As far as the area, I've talked to many people about most of the zip codes in KC and they all say different things. I have a general idea of where the worst areas are but in the end I'll just make sure who I partner with is comfortable with the deal and trust their judgement as far as the area.  

Which area in Missouri? Would you recommend the online auction route?

Thanks @Keith Kellermeyer. That's the route I was leaning toward. I've already networked a bit on BP and facebook in KC but it seems that everyone has differing opinions about certain neighborhoods and that's my biggest uncertainty right now. That's why I need to find someone who's already had success in the area so I can just tag along on the "Repeat" part of BRRRR. I just want to get started ASAP with the lowest risk possible. Just like everyone else who hasn't started yet. Haha.