All Forum Posts by: Luke Terry

Hope you all can make it

Brew Garden 18590 Bagley Rd Middleburg Heights, Ohio

2/22 6pm-8pm

@Ray Johnson I agree.  That's something we typically factor in but I didn't in this example.  Thanks

Hey folks,

We're in the East Cleveland market looking at buying SFH's to flip. For those with experience doing rehabs, what's your target profit margin you look for evaluating deals?

We've been going for a 20% profit off sales price but the markets pretty tight and when analyzing properties we typically don't think we'll be able to achieve those targets without asking for $10K or less than the listing price, which sellers aren't willing to bit on.

We're trying alternate forms of finding properties (driving for dollars, tax delinquent lists, and auctions) as well. But for anyone with experience doing rehabs through the the MLS, what's the target return you go for when buying a house? Any recommendations on how you modify your plans during a seller's market or how we should be thinking about this? I understand some profits is better than no profits but we don't want to tie up too much cash and time in a 6 month project that isn't going to move the needle much for us.

Thanks for your help.

Here's an example:

Property is listed at $65K. We think we can rehab it for $40K (including holding costs and closing costs) which would make total cash needed at $105K. We estimate we can sell it for $120K, making a $15K profit.

However, a 20% return on $120K is $24K, so to achieve that target we'd need to buy the house for $56K instead of $65K, which hasn't made us very successful so far.

Hey folks,

We're in the Cleveland market looking at buying SFH's to flip. For those with experience doing rehabs, what's your target profit margin you look for in evaluating deals?

We've been going for a 20% profit off sales price but the markets pretty tight and when analyzing properties we typically don't think we'll be able to achieve those targets without asking for $10K or less than the listing price, which sellers aren't willing to bit on.

We're trying alternate forms of finding properties (driving for dollars, tax delinquent lists, and auctions) as well. But for anyone with experience doing rehabs through the the MLS, what's the target return you go for when buying a house? Any recommendations on how you modify your plans during a seller's market or how we should be thinking about this? I understand some profits is better than no profits but we don't want to tie up too much cash and time in a 6 month project that isn't going to move the needle much for us.

Thanks for your help.

Here's an example:

Property is listed at $65K.  We think we can rehab it for $40K (including holding costs and closing costs)  which would make total cash needed at $105K.  We estimate we can sell it for $120K, making a $15K profit.

However, a 20% return on $120K is $24K, so to achieve that target we'd need to buy the house for $56K instead of $65K, which hasn't made us very successful so far.

Hello everyone, 

I'm partnering with two other investors to work together on flipping houses to raise enough cash to then buy and hold a larger multi-unit.

In setting up our operating agreement, what advice do you have to make sure we consider and include? (We'll likely work with a lawyer too but I wanted to crowd source some ideas from people who've been there before).

Here's a little more detail about our goals and roles.

1. We each are committed and add something to the team (one's a contractor, one's great at analysis, one spends time with real estate agents, potential sellers, and raising money). Even with defined roles, we're all willing to share responsibilities and do what it takes to complete projects and find the next project.

2. We each will be making financial contributions to the projects as well (through personal cash and lines of credit).

3. Our goal is to do 10 flips over the next year to position ourselves to buy a multi-unit apartment to buy and hold

4. We plan to have one LLC for the flipping business, and then create a 2nd one when it comes time to buy the multi-family unit

5. We want to make sure for the multi-family unit LLC that there's a clear and equitable exit strategy for any partner who wishes to liquidate down the road.

Thanks for any insights you have to offer.

No problem, try this link

2017 Market Research

Hello everyone, I came across this 2017 multi-family market analysis that I found helpful from Marcus and Millichap so I thought I'd pass it along.  What resources have you found helpful when doing market research?

https://www.marcusmillichap.com/-/media/files/research/research%20reports/national%20reports/2017/2017%20mm%20mf%20inv%20forecast.pdf

Hi Amir, This website may help https://smartasset.com/taxes/ohio-property-tax-calculator

Hi Casey, I recently have moved here (Twinsburg) from Los Angeles. We have a few properties under our belt and are looking to expand and connect with others as I’m starting to familiarize myself in the area. I’m thinking of partnering with someone for a flip or BRrrr where there’s opportunities to force equity, which is something I haven’t done too much before. Previously we were just lucky buying properties at the right place and time that we’re pretty much move in ready

I honestly don't remember for the syndication that I joined how much the dealers put down themselves.  It was certainly less than half.  I think it was about 40 investors total that contributed about $4MM for the syndication as a down payment plus reserves etc. that were needed during the renovations they did.

Here is the group I was a part of.  They may be willing to provide some feedback for you if you reach out to them.

http://financial-attunement.com/