All Forum Posts by: Jose Jacob

 This is a very broad interest.  There are several types of RE investment.  You need to figure out which niche you like to start or stick with.  There are types like Long term investment, short terms. wholesaling, flipping, wholetaling etc....  My suggestion is to choose one or two and study that well before you jump in.  Then you need capital. it cud be OPM or your money.  So choose one of the niche and ask questions about it and others will be more clear to answer your questions.  I am flipping so I can answer any questions about it.  Feel free to contact.

 Just curious, what made you choose that niche, flipping ?   I am a realtor for over 35 years and flipping for last 10.  Flipping need a good experience. Lot of things can go wrong and cud eat your capital. Not to discourage you but to equip you.  Study flipping very well before you jump in. 

This is a smart way to get better ROI. Digging out the basement of an older home is very risky. Water seepage is the main hurdle. Contractors have to hold the structure above (if you have one) while they are digging. You may find other issues while they digging. In my RE journey, I have seen several unexpected issues while renovating houses. Digging basement may face way more than that of renovation . Contractors will not be able to forecast it before starting the job. IN that case, you will end up spending more than the estimate.

The answer is NO.  Lenders will not take a risk of 90-95% on your deal.  Deal like this need at least 25 to 30% plus closing costs. If the unit need any repairs, you may have to come up with that also. If you can plan accordingly and raise the rent (if it is possible) you can refinance after 2 to 3 years and  can pull back your down payment after refinancing by either raising the rent or property appreciation. Most investors keep 30-50% equity in units in case if they have to face a downward trend in the future.

I am a fix&flipper for last 10 years in NY and getting into out of state fix&flipping. When I look into out of state flipping, i am trying to find a property below $100K and a cosmetic repairs of $20-$30K to start with even if I have ton of experience in NY as a flipper. . I do have PML and HML to help me. My point is that, as a new investor in the field of fix&flip, you may face several challenges, one of those are finding the right lender with this large scale reno. Also most lenders will not finance reno cost to new fix&flippers due to risk. They may give you 70 to 80 LTV and you may have to come up with the reno cost. The one who told you that they wont lend you for that kind of extensive reno cuz you are a new flipper. An other hurdle you will face is to find a good contractor. My humble advise to you is to start with a cosmetic repairs and go full gut after you completed two to three cosmetic and get a good team with you. That's what I am planning to do out of state. Good Luck

Depending on how you are planning to pay your friend the profit out of the transaction. When you invite any type partnership, it has to be in a crystal clear written agreement between the partners. I have seen friendship go south with partnership. It will be very hard (in most cases) to keep friendship with a business relationship until it has to be written and each one follow the rules according to that written agreement. You can give a percentage of the membership to your friend if you planning to share the profit and your friend can be a member for ever. If that person want profit from each deal going along, you can make agreement with each deal you are doing. It seems like you both have conversation to buy and hold properties in long hold. IN that case, you both should be in LLC to protect each other. Good luck

 One simple explanation is that 1-4 units considered in Residential category. It will upgrade to Commercial from 5 and up. Entirely different class and many rules and regulations will have to be followed to maintain commercial units. Its like you are operating a boat vs a ship. Happy to answer any question you may have in the future.  feel free to contact 

 He graduated to do whole sale there now. 

 That is correct  1% ALL in 

It seems like you have a 3000 sq.ft house. That's a pretty big house. Your exit is BRRRR. So $15K over budget on a 3000 sq.ft home with an exit strategy of a BRRRR is not that bad. If your exit is a flip I would be more careful. Out of State investing is not that simple. So many things can go wrong especially if you don't have a trustworthy GC. I do out of state investing but I studied the market over 6 months and spoke to several agents, contractors, Sphere of Influence before jumped in. Good Luck