All Forum Posts by: Martin Lindsay

If you can access some working capital through a HELOC I'd 100% do it. If you and your wife both have stable and sufficient income to support your living expenses, then I'd use that investing capital to do the BRRRR strategy.

If you're looking to jump in full time, doing a few flips to generate that working capital may be a better option. 

@Aj 

@AJ Shepard Using your advice, you would basically have the funds deposited to the account of the LLC and then that LLC writes checks to your flipping entity? Just want to make sure I understand that correctly as I'm in the exact same position and and following the answers of this post. So far I've only done one project where I used a small loan as the down payment and the rest with hard money. They wrote a check to my LLC and we signed a promissory note. It worked but I feel like theres definitely more professional ways to do things to open up opportunities to private money that isn't as close as family or friend

Not unless there's some value add opportunity along with sticking utilities to the tenants. It would take you over 9 years to make back your down payment and actually start profiting with that current cash flow. I always look to buy rental properties using the BRRR strategy so that I can pull at least some of my money back out.

Definitely go LVP for flooring. If you have comps that are updated and in good condition with market rents, copy them. 

@Account Closed Exactly. Like I mentioned I definitely learned how well I can perform while at somewhat of a distance during lockdown. Essentially it taught me the real value of building a system to run your business. To me, having systems in place allow you to distinguish the difference between a "project" that you're working on WITH your team versus a "business" that you're running and leading your team. 

I agree with @Alan Feldman. You won't really get a straight answer of which route is better as it pertains to your goals and risk tolerance. My suggestion would be to assess your big picture goals, and then explore your options with this property to see what gets you closest. 

As an example, my current goal is to build more working capital through flips to scale and buy more rentals. I have a few rentals I was trying to refinance, but was running into various roadblocks and wasn't getting what I needed therefore I decided to sell them and take my nice profit which falls in line with my goal.

Every move you make should be the most advantageous to set you up for the next step in your plan. Hope this helps!

Seems like everyone knows that networking is key to growth but I love that you took it a step further and created a "pitch." This is definitely something I'm going to start working on as not everyone we meet is going to want to hear a drawn out explanation of what we do. Short and sweet and can be thrown into an elevator conversation as you said. Love it!

Several of the classics lol. 

- Underestimating rehab costs and timelines. It's best to be as detailed as possible when breaking down rehab costs and knowing the correct order things should be completed. This will help with the timeliness of the rehab. 

- Not doing good enough due diligence. When walking a property before making an offer or while under contract a good contractor will do a good job pointing out things that need to be repaired, but its literally the job of a home inspector to find EVERYTHING they can. A few hundred bucks for peace of mind can save you thousands (trust me.)

- Hiring the appropriate team to handle your workload. I have a good relationship with a contractor but its only him. He does great work at great prices, but it takes twice as long as someone who has other workers. After the extended time that goes to waste, plus additional carrying costs, this can eventually stop being worth it. It's better to pay someone that has the appropriate labor force to handle the capacity of the job. 

- Stay active and in control but at a distance. I've made the mistake of doing some of the work myself and I always regret it. Yes it saves me a bit of money but I'm not a handyman or contractor by trade so I take longer, but most importantly it takes my time, focus and energy away from doing tasks to grow my business as the investor/owner. I can't focus on marketing, networking, building systems etc. when I have a paintbrush in my hand all day for a week. The goal is the work ON your business not IN your business. 

I'm sure if you ask me again in a year I'll probably have a ton of other lessons learned lol but these are what come to mind. Hope it helps!

@Brian Ellis Great plan! Gotta have something going to bring home the bacon. In my case I ended up pursuing BRRR rentals. All were successful, but I realized later than I should have done more flips in the beginning to get that rehab experience and generate more capital first. It's good you have a clear plan to fuel your growth. I wish you the best!

@Gus Muller Totally understand and agree! Building relationships is of top importance to me too so investing in people first is always the best route. It may be something you create a clause for or discuss with sellers just as a backup backup all else fails plan D or something haha. To your point though I think partnering with another rehabber would be best of both worlds and who knows, it could open up more connections that may help you scale further so that you can handle this new volume!