All Forum Posts by: Jordan Madewell

I would do progress draws on payment. He only gets paid after certain things are completed/or % of job is completed. Do not do a half down type of agreement.

ok, I'll ask some of my guys, but off the top of my head wraps in general aren't allowed anymore, but where you would have the most luck is with a local portfolio lender that can look at you specifically and look at the asset. If they are required to check off the boxes then they won't have to flexibility to do what you want. The smaller local guys that are underwriting deals themselves is where you will have the most luck. Especially on SFR. Now commercial, I have a really good guy for that. He's strict, but on the stuff he can actually do, he's got really competitive programs. Hope this helps.

So do you need lenders that lend more leniently?  Or that will do wraps?  I have a guy in Lubbock that has a program that allows for lower credit scores to apply if you want his info.

I'm with you, it's not how I usually do things either but if your goal is to sell this one, they may help you sell it since they'd want the business, and they would like it because of the little to no maintenance.

It sounds like you're selling it, I would find an agent with investment experience (or call a few property management companies and ask if any of their clients would be interested in buying) but if it's rented chances are that will help you.  Unless the person or entity buying has more than 2 years experience in rental they only use their w2 income to qualify for the mortgage anyway.  So I would say having it rented will help.  And contacting those types will increase chances if selling.  They are many that want "turnkey," and I would say yours would fit.

they do have a few differences. Mainly this will be determined by the municipality or agencies tasked with rates in your area, and comparable properties that will receive a similar assessment, and then it will change some upon a sale. Also, keep in mind that when you are running numbers on a deal, that after you purchase it, in some cases that can change the taxable value. I have seen where the appraisal district learns what someone has paid for a deal, and the next year tries to value the tax rates on that price.  Doesn't always happen but something to consider.

And to answer John's question, my projected returns for the first 5 years were something like 0, 2%, 4%, 5%, and 6%.  If you are building to sell it, you can get a premium since it is Class A at that point, no capex needed, but you won't cash flow much unless you have closet to 50% down.  I ran my assumptions at 20-30%.  If you're buying and holding, you need to be in it about 10 years to really make good cash flow.  If you're thinking about resale, you'll need to hold 3-5 or 4-6 years (unless you're in Austin, or Dallas) and you should double your original investment in this market, but you won't cash flow a ton while you wait.  Your criteria should really be on building for resale, buy and hold really long, or that your return will be comparable to an existing buy if you held it a similar amount of time.

I am a contractor in Lubbock and just ran a model for 30 units (5 bldgs of 6 units) single story (this is popular in Lubbock) My cost to build was about $85-$90/sf (excluding the cost of land).  The huge variable is land and if you have to develop the land, or if it's already been platted, had utility hookups run, etc.  Obviously, this is on a commercial deal, and so it becomes much more affordable developing if you build more units and spread the development costs over more units.  If you're building a 2,3, or 4 plex obviously you're a little more limited on that, but your overall cost are not as great either.  If you're in DFW, Austin, SA or Houston your labor costs are cheaper too.   So, if you get the land for next to nothing, or maybe talk the land owner to partnering on the deal with you it starts to make a lot more sense.

Does anyone have experience working with or using the Lifestyles Unlimited mentoring/coaching program?