All Forum Posts by: Mark Anderson

I agree with the other posters. Make the meeting about learning from him. The point is to build a relationship so one of your main goals should be to get a second meeting with this guy.

If he does ask about you or your real estate goals, tell him what you plan on doing but make sure you ask him for his input or feedback, don't try to sell him on your company.

Craigslist is really bad about spam. If you ever post anything on there, be prepared for more emails from "Melinda" and all of her friends.

I agree with Jon but on the flipside, I have seen some hard money lenders and transactional lenders advertise they will provide pre-approval letters for investors. They know there is a demand for this "service". Usually there is a fee involved because you have to be a "member" or their program. So I wouldn't feel too bad.

I've done it once before. I used a pre-approval letter from a hard money lender even though I ended up purchasing with private money. I felt wierd about it too.

I've been to the tax sales before. Its a good place to meet local investors.

Keep looking for deals, sooner rather than later, you will find one that will be a much better opportunity for your first deal.

Glynn,
I too am from Memphis and I agree with the other posters. I don't really like the sound of this. It almost seems you've fallen in love with the house. Instead, fall in love with the numbers whenever you do a deal.

If this is your first flip, you my want to consider a more cut and dry deal in a more typical neighborhood.

@Bill Shultz
I think I've heard Larry Goins talk about this as well. It's been awhile but wasn't he talking about selling retail to end users. They can't get financing from traditional lenders so you act as the bank and do owner financing. Kind of like flipping a house but instead of receiving your profits in a lump sum when you sell the house, you receive them in the form of a mortgage payment from the end user spread out over the life of the owner financed loan.

You could probably do the same thing by selling to a landlord as mentioned by some of the other posters, but your spreads would be smaller.

A few other options are wholesaling, which is a good way to get involved when you have limited available funds or bird-dogging where you simply act as a property locator for other investors.

You could develop a relationship with a local investor and help him/her with their business. They could pay you in one of two ways: with actual dollars or by teaching/mentoring you.

At the end of the day, you have to get aggressive and make something happen. It will not fall in your lap and nobody will give you anything. You must initiate.

I think Jon's math is pretty good. I too am concerned about your rehab budget on the SFR. It seems low to me. I'm assuming this will be your first rehab. Did you get quotes yet for the rest of the work (other than the electrical)? One of the hardest parts about doing your first rehab is you probably don't have relationships built with good quality contractors.

None of this is meant to scare you. The best way to learn is by doing and the only way to build relationships with contractors is by actually giving them work to do.

If you know a more experienced rehabber in your area, buy him/her lunch, walk them through your house and get their input to see if your budget and scope of work are accurate.

I agree 100% with Financexaminer. We require a W9 from every contractor we deal with before we will give them a penny. We don't care about the $600 rule, we send 1099's to everyone. It is simply a requirement to work with us. That way, we know we are covered. I would run away from any contractor who doesn't want to do a W9.

If the roof only has 6-12 months left and you already have the money to replace, then you should go ahead and do it now while you are doing the other renovations. You may inconvenience your tenants if you do it later. Also, it will save you the headache and worry of checking the roof for leaks everytime it rains for the next year.

Since this is a rental property, you can use a 3-tab shingle as opposed to an architectural shingle. That should hold the cost down. Also, you can go with a 20 year life shingle instead of 25 or 30 year life if you are concerned about the cost. Even though laying over the existing shingles will reduce the cost, I wouldn't recommend it for two reasons. #1, you won't be able to see any of the decking to know if any of it needs repaired/replaced and #2, laying over the old shingles will shorten the life of the new shingles.