All Forum Posts by: Jim M.

First ever BP forum post. I’m a 30 year GC in coastal resort town. Standard is for me is high end clients who want to improve their home and return the beauty into their ease style and comfort. Along the way I’ve learned a thing or 3 in how to efficiently set homes apart from the norm. I’ve done some flips all to success but not my every day stock in trade. YET. My wife and I are very design and architecture minded. as for the heavy lifting? It’s all I do. My approach let’s just say is different. So... I’ve found a new flip market that interests me. One with population growth of business and families. In a beautiful part of the country. The perfect blend of urban and country. Seemingly still a manageable entry price threshold of home product. Demand is high. Inventory is low and Price still low. (Compared to Southern California anyway) I’m looking at deals analyzing ARV driving neighborhoods. Observing the local habits of these folks. I 100% know what sparks the interest of MRS Homebuyer and know Dads hot buttons as well. In an area with rising values and fast demographic shifts of what the NEW RESIDENTS wish for them self’s but simply doesn’t exist yet in terms of feel and finishes. We are the same. Let’s run the numbers. 1800 sq ft house great bones 3/4 acre lot. Needs love but doesn’t as all intimidate me. Best school district in the state. Downtown and mountain views Equestrian area. Mature trees. Same MLS # as MM$ estate caliber homes. Walking distance to restaurants school and highway close. Oh and a view property. Asking price high 300s. It needs a 1000sq. Ft. Addition of master suite bringing the footage to 2800. 3/3. As far as home features go.... I can deliver a fully functional Death Star of style grace and location efficiently. But... my ARV needs to be in the high 600k realm. Or high 280 per sq ft. Mom wants to be here. Inventory of what I intend DOES NOT EXIST. What could be wrong? Where I live and work this would be the find of the century at this price. Like 1/3 of the price for sure! Well... what I’m encountering is that if I take the leap? Restore the beauty. Fit with the neighbors higher values around me. What I’m really doing is setting the market price. Because appraisals are arrived at by formula vs. form. Getting the appraised value to a place that matches MY ARV where my buyers can be approved to purchase. Any of you have success in this puzzle? How to get the appraised value in line with what the property actually is. Vs. simply what the data shows or condition and style be damned. Your thoughts?

Kind of an interesting Banter going on here about HML vs Cash Vs Conventional

While I too have never used HML here are the things I think about with them

For easy math lest use $200K as the loan amount

The assumed qualifiers for the person who are looking to borrow are Solid credit, willing to allow 1st position to the HMlender, Able to have their own skin in the game vis a vie capitol for renovations etc… Targeted a real deal.

My questions would be for Don Kanipol HML guy what is the cost of this 200K capitol for 120 days?

Then compare what Gerald and others paid for the same

Then compare this with industry standards That for me are really not known and snake oil like

Not real clear on your intensions? Hold or Flip? Reno equations are different for each. Durability and maintenance vs interest and curb appeal EG:

Id say your 15K budget seems woefully light?

Best to always identify quantities and tasks to improve and then plug in some meaningful allowances for each if you can?

Why Is it that we always see this same $25K Rehab number floating around? On the surface of things This same repeating number seems So lazily thrown about.

The answer is in the breakdown. What Does the place need? Safe to assume

Without seeing it and without any pictures to reference?

Paint Interior exterior complete $3,800.00

Cabinet re finishing $900.00

Countertop Slabs allowance Baths and kitchen allowance $3500.00

Appliances $2400.00

Flooring Blend of laminate carpet and tile $6250.00

Complete New Kitchen sink $800.00

Deep cleaning $600.00

HVAC service and assesment $300.00

Light fixtures $400.00

Plugs switches trims $170.00

Door, Stops, Locks and Handles $300.00

Minor Repairs Drywall, Cabinets, Closets, Windows Etc… $1800.00

Minor plumbing repairs $700.00 COULD BE 3X

Tub and shower RE glazing $900.00

Landscape Needs $2400.00 Minor COULD BE 3X

$25,220.00

From here its a safe bet to allow 12% for unforeseens and 17 total days of time to complete given you have a professional experienced crew well versed in investment rehabs.

So the property that is "TURNKEY" Needs none of this? Doubt it. The word Turnkey is equally loosely thrown out there as $25K

The key is truly understanding what you are looking at in both dollars, ROI and time

Thank you Arthur
Very sound advice and exactly the type of feedback I am looking for. My Goals here are me learning more not only about RE investing but Investing and sound financial philosophy in general.
So a part of my goals are to broaden my financial mind and horizons. and sharing the knowledge I do have in a constructive way. (sound familiar?)

Cheers
Jim

BP people,
Do any of you out there have any success or horror stories about pulling out of 401Ks and using those funds as self directed? Or, am I considering to purposefully step on a land mine and blow my nuts off with Tax burden, penalties and a shopping cart under a bridge? I see and research very conservative deals that have safety of principal much higher returns compared to the erosion I see with my 401 K. Like the man under the bridge...Is this crazy talk or is whats sane is a passive investment that does nothing but wait for me to wake up and die. Whats wrong is I do not know whats right.

Jim Mackel

Hello All,
I am new to this group of Bigger Pockets and welcome your input and my involvement here.

I am a licensed General Contractor home builder 45 year old married father of 2 boys in Coastal Orange county Ca. Also, I have a preservation Company where i manage REO assets for Mortgage servicers/ Banks/ Credit Unions/ RE brokerages. I see and report on 100s of properties monthly and personally have seen it all in REOs and the horror show of humanity that goes with that.

What I have discovered is that my clients have thousand of REOs nationally and through my relationships at the Asset Manager level I have access or the ability to look at them all. Allot of data.

Up until recently I have focused very little effort in pursuing my own jumping in point as an REO investor. KNowing that green grass gets cut I instead, opted to familiarize myself through working within the REO system as a business owner and vendor to them. What I have seen is there are many many niches to target and explore. Court House steps, Trust deed sales, Short sales, Hold and rent, Section 8's etc etc. My time of the past 24 months has been focused on making myself an expert in Property Preservation. and the processes of asset managers.

Having now accomplished that

I feel I am right at the doorstep of exploration into my own next best step into REO and RE investment properties. I look forward to mining this site for useful bits of insight, regions or hot spots/regions of proven success.

Warm regards the newest BP guy
jim Mackel