All Forum Posts by: Joseph Beilke

@Derek Fernandez

First off we need more info on the property you are trying to flip. Secondly, you said you work for minimum wage but you didn't say what you do?  Does your current job provide you any leverage in applicable experience or maybe a partnership in the flip.  Lastly, back to partnership, have your reach out to family or friends.  This might be your best way to gain experience for the hard lender on the next deal.  See if you can structure a partnership with a relative or friend that puts the least amount of risk on them and gives them the highest reward.  You might ask yourself, then why should I do it if I have most the risk and less gain?  The answer in short is what you lack most, experience.  The knowledge growth is your biggest pay out, and each time you do a project your slid the scale more and more to your favor.  Before you know it, lenders will be giving you the best possible terms and hold the most risk.  

How I see it working best for you with out knowing the numbers is giving up majority equity, and give up majority profits for your blood sweat and tears. I know this is vague and I wish I could provide you with better plan, but we need to know more. 

@Colby Wartman

This question should be asked directly to your lender of choice.  I not 100% positive because I am not a lender, but I will say I have had customers with PM and Self manage have second home loans.  It also could be a state to state law, so this is something you dig deeper into.  My first stop would be my current lender and my second stop would be a competitive lender and see if I got the same answer.

Good Luck!

@Greg R.

I agree with you mostly, on what is driving this crazy train.  But and its a big "But" If you look carefully over a 40ish year span most markets are on average 10-20% over and above what "Normal" should be with 2.5% to 3% year over year appreciation.  In Palm Coast Florida where I am, a 20% drop would put us 1.43% over 12 month Median Sale price change.  I would call that a correction.  I really think the nation will see a correction, but a some market will see a crash, and If I was a betting man it would be places that are taxed heavy, proposed rent controls, and political unfavorable for investors and business. Add that and more places being able to work remote and National crash seems unlikely.  Area's that are the opposite will see a correction in my opinion and normal growth.  But I don't have a crystal ball, so we all are just giving our 2 cent based on our own research.  

@Seth Baumgartner

Getting into Real Estate investing is like having children, you're really never ready but you figured it out, at least that is what I have been told. LOL. NO KIDS HERE! Anyway, with the current supply issue and inflation on pretty much everything the BRRRR method has too be held to a very strict budget or you will not get the value out of it, if we continue down this Real Estate correction. I see you're in Florida and I think us Florida investors are a little bit more protected from a major crash. We still have low supply on homes, builders are still pumping them out, and people are still moving here and less are moving out. Interest rate have scared a lot of buyers, but the shock will wear off and people will begin buying again, the question is how long will it take and will your BRRRR line up with it. That's impossible to know, but you can protect yourself by making sure you save at every turn and make it sure you buy in a desirable area.

@Juan V Lopez talked about multi family, and he's right.  I would personally start with a duplex you can rehab.  Maybe work a deal with your first tenant that when you finish rehabbing the side you live they move over to it with no rent increase.  You swap and then start rehabbing the other side.  When it all done and the first lease is up, you increase to market value.  The next year you basically live for free because the tenant covers the mortgage while you save and search for your next property.

Good LUCK!

@Michael Mackney

Everyone is pretty much saying the same thing.  But I want you to think about what maintenance items were repaired, is this long term repair or replacement that will give you peace of mind for while?  Secondly, how much are you paying for PM and if you sell are you bound to a contract and if you don't sell can get out of it and shop around or self manage?  What is structured in your rent, can you make changes to have then tenants pick up some of the cost?  What was the purchase price, will the depreciation off set some of your yearly tax burden from other incomes?  If you end up paying 12K less a year in taxes than you did last year, that's a 1K month cash flow that you get all at once when you get a return.  These are some of the things you need to think about before you jump back in the market to sell.  If selling is the best option I would jump fast,  prices are coming down quick.  I am anticipating a 10-20% price adjustment here in Palm Coast Fl.  Which will pretty much knock out the last 12 months in appreciation.  Go luck on which ever path you take!

@Christopher Knibb

Sent you a PM

@Account Closed

If you follow the rule of thumbs with current inflated prices most properties in Florida will not make sense right now. Even with the interest rate hikes, investors with cash are still buying and relocating their cash. As for a Duplex that you live in, to make it make sense is to live basically live mortgage or rent free. The ROI doesn't always need to 8-10% CoC return. You are gaining wealth by not putting out any or very little of your own budget to live. You have an asset that has a mortgage and another person is paying it down, but you get the tax benefit.

You might want to consider expanding your search too.  Many new duplexes will not be in the areas you listed.  Might want to look south in Middleburg, Palm Coast or north near the Airport. Some of the nicest will be at the beach but will cost a pretty penny, but your rent should cover most of your mortgage.  At the beach you could also AirBnB the other side and self Clean and manage.  You would have a very nice return on that scenario.

@Account Closed

Good Morning Dilan,  I'm in Palm Coast and have sold some homes in the and around Jax.  I'm also a Firefighter in the area, and what I hear other firefighter charge to the younger guys in the departments are anywhere from $500 to $800 a month and that include all services and utilities.  

But have you thought about a duplex?  Why rent a room and have someone in your space, when you could own the whole property and rent one-side out?. The benefits of this is privacy, and higher income.  Typically you could charge close to enough in rent to cover 75% or more of your entire mortgage, they pay for all there own utilities and services.  You could basically live for free and save money to do it again.  

Are you tryin to cut your nose off despite your face? You need to finish what you started and don't let the GC pull any more fast ones on you. Next you need a BPO and/or CMA, Get the numbers you needs to complete the math problem. Talk with your CPA and run scenario over the next few years and how it looks for ROI. Most of us on here have enough experience to see the bigger picture plane as day. But you seem to be attached to this house and you are trying to figure out or justify making it work.

The market is changing and you have the cards stacked against you.  Outside of the cost you complain about taxes, and tenants too.  It sounds like you are not in a favorable location either.   If I had to guess your town is probably talking about rent control too, so you better set it high! 

Provide the address and bet you will get hand full of values that are pretty close to accurate from the BP universe. You might be surprised what they reveal. 

J.B

They saw you coming! Deep pockets and not willing to say no. I work as a Firefighter and a part owner of a Real estate brokerage. My wife and I manage our own properties and do a lot of the basic work ourself. You have to make time to save money and capitalize the ROI!

Lets do paint breakdown for example.  We just painted 2 sides of a duplex, 1100 per side.  2200sqft total.  Same color walls, one color only and white trim,  we did not paint the doors.  Bought 15 Gallons of sherwin-William Super paint, used about 12.  All our properties in Florida have the same color walls, "Sea Salt". That left over paint can be use to touch up at any location to include our personal home, same for the white base.  Three 5 gallon buckets cost us about $500, 3 gallons of white trim for $75, then spent another $125 on some new supplies. inside paint all in for $700.  Took her and I 4 whole days to paint both units.  Total man hours 64.  If I paid myself $75 that would equal $4800.00 plus $700 in paint.  Total $5500.00.  

See what I'm getting at, you got took hard!  They painted half the space as a pro if I had to guess more than twice as much.  

I'm really not trying to rub this in but you just learn a very expensive lesson.  This property will give you chest pain for many years to come and the memory of how it all went will haunt you.  

It's time to sell.