All Forum Posts by: Mo Farraj

Hi BP community,

I have a deal I am looking to partner in with an investor I met at a networking event. This investor has done a few flips before but this is my first one. The deal requires me to put down about 60k in cash, I want to make sure I am covered on all basis - can anyone advise me on the contracts I should have a lawyer review? The money will be put in Escrow but what else should I do to ensure my back is covered and this investor doesn’t run off with my money?

Thank you in advance.

Thanks,

Mo

@Jay Hinrichs Hi Jay - what if the deals in my backyard are too expensive? I'm in Brooklyn and a 2-4 family will run you at least 750k anywhere you look. Why wouldn't a newbie try to BRRR in surrounding areas/states?

@Shirley R. Jesus I feel your pain. Have you looked into hiring a PM? Also, why did you choose to get into c-d neighborhoods? Reading other posts by members, seems like more of a headache than anything else. Though the deals might be a cheaper to buy - seems like a more expensive laundry list of expenses down the line. 

@Shirley R. Thank you for the comment. I myself am trying to look in CT to invest. What do you mean by every day involvement? Are you talking in terms of renovating the property or being involved with the tenant complaints? 

If you are talking in terms of the tenant complaints, why are you so hands on everyday? What is your usually tenant call sound like and what are you experiences being a landlord thus far? Thank you in advance. 

@Guy Yoes @Guy Yoes Great post, thank you. Just to confirm you meant 13,050 a year not a month correct?

@Alina Trigub You make a lot of great points.

However in regards to number 2, how would active investing give Ted better returns with 60k?

For example, let’s say he put 25% down on a 200k 2 family generating 2.2k a month (which is realistic in NY/CT). After all expenses and savings for future repairs/expenditures - he might come out with 100-300 a month. This includes a PM since Ted looks like he has a fairly tight schedule.

If he were to put it in a MF Syndication, a 10% a year return on his 60k would be over $500-$600 a month if all goes well.

Let me know you thoughts, thank you!

@Brian Ploszay Thank you for sharing Brian. In regards to your 2nd point, what do you think the overall lesson you took for long term holds was? Is it worth holding past 5-7 years? Doesn’t it feel defeating to have to spend a years profits on repairs? Thank you!

@David DiCenso Thank you again David, a ton of great info in your post and link you've sent over. 

@Jim Cummings Great way of putting it, thank you for the reply!

@David DiCenso I really appreciate you taking the time out and replying to the post.

I think you make several valid points. To answer your question - my strategy here is to brrr the properties i invest my cash into. My biggest fear is investing in a home that will not rent and just sit on the market with no interest (hope that is a normal fear for other new investors).

What are some other metrics you suggest a new investor should be aware of when investing? I am currently calculating cap rate, comparable home sales, and overall neighborhood growth. If something has been sitting on the market for 45+ days, would are some other things you may look at?

Thanks,

Mo