All Forum Posts by: Michelle Massaro

We are brand new to Maryville, having moved out from Southern California. My husband and I will hope to attend Thursday night and meet some new real estate friends. 👍

@Rick Rolfe, yes that's what I mean. 

Check out Texas (Houston, Dallas, San Antonio), Florida, and Idaho as prospects. There are some strong markets from what I've read. Parts of the Midwest seem to be growing as people and business leave CA. Of course, coastal properties will always be valuable long-term. If I could find a good deal in So Cal I'd be interested enough to take a serious look. I'd probably want an equity partner to go in with though (and would likely need one because it's a pricier market.) 

Valid concern. Always record your deed of trust on the subject property. If you're putting money into the deal, retain the cash in your account and pay expenses directly to contractors. Make sure the other party has as much skin in the game as you do. If you're still evaluating a deal before bringing on a partner, get it under contract first. You can also form a partnership LLC to share equal legal rights on the deal. Make sure all agreements are in writing with sufficient language covering all points and outlining all what-ifs should a breach occur.

When calculating financing costs you will also need to pad your estimated time to completion. If you're expecting 3-4 months and it turns into 9 and there's not enough upside to absorb that, you're in a bad spot. I'd be digging in to WHY the owner is cutting his losses rather than finishing the rehab. What trouble did he run into? Does he have quotes from his own contractors for the work (particularly foundation?) Talk to them. In my experience, there's usually a skeleton in the closet when a rehabber decides to abandon ship partway through. 

Hi @Joseph Kelly,

You would provide a sample Pro-Forma including all purchase costs, rehab budget, financing costs, holding costs, taxes, selling costs, expected time to complete, ARV (After Repair Value) and derive a projected profit from those figures. Always pad your expenses with a contingency, and especially pad it for inexperience. And run your numbers with the lower side of the ARV.

If you're looking for a financial partner, you'll need to think about what they are risking and what you are risking. If you don't have any cash to put into the deal, all the risk is on them and you're unlikely to find someone willing to go for it. You'll want to find someone who has experience as well as funds and expect to keep them involved from start to finish. You may want to start an LLC with the partner so they are officially and legally keeping control of their money and investment. Be willing to split the profit very favorably toward the partner until you've proven yourself and built some capital to put some of your own skin in the game.

For a presentation you would also want to provide information on what teams you have access to--do you have an agent with expertise in local neighborhood pockets, one who will sell for 1%, do you have crews, someone bringing you wholesales, etc? Give as much info as possible to a potential partner. Transparency is key.

@Rick Rolfe I've JV'd (silent partner) but haven't yet stepped out on my own. That's my goal currently. I've worked with an investment company as a Financial Manager evaluating deals in the IE but mostly in the LA area. I'm personally more nervous about a rental situation in CA than a flip, just because of the unknowns right now. I might feel different next year. I'd be interested in doing a couple flips and then taking that capital and putting it into out of state markets in rentals. I'm not handy but I have reliable contractors (for the IE, not quite up to par for the high-end LA area.)

What about fix-and-flips in the Riverside area?