All Forum Posts by: Michael Evans

Investment Info:

Single-family residence fix & flip investment in Warrington.

Purchase price: $38,000
Cash invested: $46,000

Managed deal for a client. Purchased a distressed property in Detroit (2+1, 744 sf, built in 1954) with a non-performing tenant. Tenant vacated property on 5/7 and now we are preparing the property to be rented by 7/1.

What made you interested in investing in this type of deal?

This is our first time using the to manage acquiring a property in Detroit. We were able to identify risks, and then manage and shift them, which is exactly what The is designed to do.

How did you find this deal and how did you negotiate it?

A wholesaler emailed me about the deal. I negotiated thr purchase price down as well as the EMD ($100) due to the amount of risk my client was taking. It paid off for my client.

How did you finance this deal?

My client paid all cash.

How did you add value to the deal?

I am managing all of the aspects of this deal: acquisition, rehabilitation, rental and sale.

What was the outcome?

We are still in the middle of turning the property into a turnkey rental. We got the non-performing tenant out on 5/7 and are now securing the property so that we can complete any repairs and then market the property to get a Section 8 tenant.

Lessons learned? Challenges?

Perform your due diligence when buying a property with an existing tenant.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

No.

Why do you want to put the property into an LLC? If it's for asset protection, you can transfer it into a trust for estate planning purposes.

Investment Info:

Single-family residence other investment in Warrington.

Purchase price: $50,000
Cash invested: $50,000

I represent an investment group based in Southern California that is acquiring properties in Detroit using a "Flip & Hold" investment strategy that involves three related companies (flip company, buy and hold company, and lending company) as part of a "closed sales system", where every house we buy has a guaranteed buyer.

Our target project cost is $50,000 all in, with ARV of at least $60,000 that rents for a minimum of $1,000 per month, targeting section 8 tenants.

What made you interested in investing in this type of deal?

We are able to get a higher cap rate in Detroit compared to California while simultaneously spreading risk over multiple properties.

How did you find this deal and how did you negotiate it?

I developed a Real Estate Deal Management System (REDMS) in 2016 as a risk management tool for flipping properties. It works in areas that have a minimum monthly rent to price ratio of at least 1.5%. You can't find that in California, but you can in the Midwest.

How did you finance this deal?

We are initially looking to use 3rd party funding, but we are establishing a lending company that will use private money to fund 1st and 2nd mortgages to our flip and buy and hold companies.

How did you add value to the deal?

We will buy distressed properties, rehab them, and flip them, preferably as owner occupied homes. If we can't flip them within 2 months, we will place a tenant in them, preferably a section 8 tenant, and sell the property as a turnkey rental to out of state investors. If after a total of 3 months we still haven't sold the property, the flip company will sell the property to the buy and hold company at a predetermined price, thereby guaranteeing the flip company a minimum profit.

What was the outcome?

We are raising capital for our "proof-of-concept" project as we speak to buy our first property by the end of the year.

Investment Info:

Single-family residence other investment in Warrington.

Purchase price: $50,000
Cash invested: $50,000

I represent an investment group based in Southern California that is acquiring properties in Detroit using a "Flip & Hold" investment strategy that involves three related companies (flip company, buy and hold company, and lending company) as part of a "closed sales system", where every house we buy has a guaranteed buyer.

Our target project cost is $50,000 all in, with ARV of at least $60,000 that rents for a minimum of $1,000 per month, targeting section 8 tenants. We are raising funds for our "proof-of-concept" project to purchase 1st property by the end of the year.

What made you interested in investing in this type of deal?

We are able to get a higher cap rate in Detroit compared to California while simultaneously spreading risk over multiple properties.

How did you find this deal and how did you negotiate it?

I developed a Real Estate Deal Management System (REDMS) in 2016 as a risk management tool for flipping properties. It works in areas that have a minimum monthly rent to price ratio of at least 1.5%. You can't find that in California, but you can in the Midwest.

How did you finance this deal?

We are initially looking to use 3rd party funding, but we are establishing a lending company that will use private money to fund 1st and 2nd mortgages to our flip and buy and hold companies.

How did you add value to the deal?

We will buy distressed properties, rehab them, and flip them, preferably as owner occupied homes. If we can't flip them within 2 months, we will place a tenant in them, preferably a section 8 tenant, and sell the property as a turnkey rental to out of state investors. If after a total of 3 months we still haven't sold the property, the flip company will sell the property to the buy and hold company at a predetermined price, thereby guaranteeing the flip company a minimum profit.

What was the outcome?

We are raising capital for our "proof-of-concept" project as we speak to buy our first property by the end of the year.

Landlords, which financial institution do you use to refinance your performing rental properties? My investment group is looking to purchase rental properties in Detroit with cash with an average value of $60,000 with monthly rents of $1,000. We then want to do a cash out refinance (at least 50% ARV) on the property to take our cash back out. Any referrals are greatly appreciated.

Great story. Keep up the good work!

Become a private money lender. Make money by being a partner in a Joint Venture. You put up the capital for the equity position and the partner manages the investment and then you split the profit after the return of your capital.