All Forum Posts by: Justin Madison

Hi @Ian Walsh.  Thank you for the post.  I understand your sentiment and I appreciate your warning.  Proverbs 11: 14 says, "Where there is no counsel, the people fall; but in the multitude of counselors there is safety."  Proverbs 15:22 says, "Without counsel plans fail, but with many advisers they succeed."  I recognize that it is ultimately on me to do my due diligence and vet the deal as well as the flipper and his team.  But I also recognize that I'm new in real estate investing and so I tremendously value this community of advisers.  Me asking questions here is part of my learning and evaluation of the deal, but it's not the whole.  Thank you for your contributions to this community.

Hi @Nghi Le, thanks again for your valuable insight concerning personal guarantees, and giving the borrower money in draws rather than all up front.

Hi @Sam Shueh, thanks again for sharing your insight.  I agree, the house is not as appealing since it is quite close to a freeway on-ramp.  Thank you for your thoughts and advise on local comps.  

Hi @Brian Pulaski, thank you very much for your thoughts and insight regarding the scope of work.  Thank you for thinking through this with a critical eye and helping me to do likewise.  I will take your advise and ask these questions about MEP, plumbing, electrical, drywall, framing, connecting all these things, etc.  Great questions.  I can tell you've done this quite a bit and I'm really grateful for your generosity in sharing your insight.  God bless you!

Hi @Account Closed, thank you very much for your insights. I totally agree that the "as is" valuation is way overinflated. I agree that DOM is a very important factor to consider as that can significantly reduce profits or even kill the deal. I need to do a bit more digging and evaluation for comps to get a better idea of what a conservative and realistic ARV would be. I posted a scope of work with budget per line item below your post. What are your thoughts on that?

Hi @Account Closed, I really appreciate you taking the time to share your experience and expertise.  That's very helpful!  Would you think the deal would be worth doing if the flipper wrote a personal guarantee?  What do you mean by "hard money will muscle you out in order to protect their investment?"  I'll take your advise and look at what hml do.  Appreciate the great advise!  God bless you Jeanette!

Hi @Jeff Pollack!  Great to see you on here.  I go to your meetup at Harry's Hofbrau regularly.  Thank you very much for sharing your insight on the Walnut Creek market.  I am aware that you have flipped some houses up there so I definiately value and wish to heed you words.  It seems like the deal is a no-go for me with the way it's currently structured.  Question I have is:  If you were in my shoes, would you seek to restructure it to make it happen and what changes would you make?  Thanks and God bless you Jeff!

Hi @Sam Shueh, thank you for your good questions and feedback.  I haven't gotten that far yet, but if I do, how would I check background, liens, credit, flip track record, etc?  Do I just ask him for that information? 

I have more work to do on comps, but he flipped a house 1 mile away at 1954 Magnolia (www.1954magnolia.com) that was a bit larger and had another bedroom, that sold for $1.3M so that's why he believes he can get $1.25M on this house.   Good question about time to market on this home.  I've thought about that myself.  I really appreciate your insight and experience.  God bless you!

Hi @Nghi Le, thank you very much for your feedback and sharing your expertise and knowledge about loans, that is very helpful!  That is a great suggestion for a personal guarantee.  Do you think the deal would be worth doing risk-wise if the personal guarantee were signed?  As for me, I am just wanting to get involved in real estate investment and learn through my experience, after sitting on the sidelines learning through books, podcasts, meetups, personal meetings, etc.  I don't know what would be the best way to get involved.  At this point, I don't have a lot of time as I work full-time and I'm very involved with my church and family, which is why I need to partner with or lend to someone with time and experience so I can learn.  I just want to try to be wise about it, that's why I posted this.  I'm so blessed by all the helpful feedback from you all.  Thank you!!

Hi @Leslie Bandy, thank you very much for the question. He provided one comp of a house he recently flipped about 1 mile away. It sold in April 2017 for around $2.3 Million. The address was 1954 Magnolia. So I imagine he is basing most of his assumed ARV off of this sale. That would be a good question to ask for his comps. I agree that $60K seems a bit slim for a rehab budget, so I asked him to send me the rehab budget. I shared it last night on this post. However, since I'm new, I'm not sure how realistic the numbers are. And it doesn't look like there is any fudge room for unforeseen expenses, at least, not from what I can see.