All Forum Posts by: Nate Narcisse

Thanks @Account Closed.

I'll definitely look into the Home Depot App. I also agree. A simplified spreadsheet with averages sounds like the way to go. Otherwise, I'll probably get paralysis analysis. Nevertheless, that's a good point: memorizing the numbers from the spreadsheet and being able to predict the repair cost just by entering the room/house. We'll see how things go.

Thank you @David Avery for the sound advice. 

I strongly agree! What I'm trying to do is quite ambitious and may not be worth my time. I'll definitely have to network with the flippers at my next REIA meeting and get some insight. I guess the bright side of increasing prices of raw material is keeping real estate investors, especially flippers, on their toes while being creative with how business is done.

Hi BP family,

I'm trying to build a template excel spreadsheet, which would include products and pricing for materials from Home Depot. Also on this spreadsheet would be different labor rates from local contractors and the square footages of each material needed  (depending on the level of Rehab). I know every rehab/remodel is different. So I figure, the best way to go about it is to rehab for the worse case scenario, which would be a full gut remodel for every part of the house. That way, I could get an idea of the cost for the most work that could be done on a house, if that level of work was required. If the house doesn't need that much work, based on the comps, then I could simply deduct from the large rehab figure/estimate and call it a mid-size rehab or a light rehab. It would be nice to have all this information in one place, hence the spreadsheet. Not to mention, it would be a nice way to estimate accurate rehab cost and creating a budget ( once I get a measurement of each room). There's a few problems I'm currently facing: 

1) How do I go about getting that information and structuring the spreadsheet? (Home depot doesn't really have a price book for all the material they sell)

2) Would I have to manually redo/update the pricing, every time the prices change? (If this is the case, then I may hire a VA to do the work)

3) Am I better off going to a different material supplier for each individual product instead of Home Depot?

Any ideas?
 

Hi @Angelina R martinez,

First off, I'm in the same boat as you. I'm also new to the scene and trying to figure things out. In terms of wholesalers getting a bad rap, it's largely due to getting the numbers wrong. In other words, getting an appropriate ARV for a subject property and estimating the correct rehab cost. Your numbers will also be influenced by the type of end buyer you're dealing with i.e. "buy and holders" and "fix and flippers". I recommend reading this article by Marty Boardman: https://www.biggerpockets.com/...

Secondly, an LLC isn't really necessary for wholesaling unless if you have assets that require protection. You'll definitely need an LLC once you buy your first property, assuming you're thinking about buy and hold investing. I think a potential downside is the cost of starting an LLC and paying for a CPA and real estate attorney. But that's the cost of doing business. As the fellow BP members have mentioned already, wholesaling for a broker depends on your state and if they require wholesalers to have a license to practice. I know you mentioned you were planning on getting your license regardless, which I think is a smart move. You'll be able to have access to the MLS, a very resourceful tool in running comps against a subject property. And you don't have to go through a real estate agent to get that information. I think the only downside is the cost for the courses.

Overall, I think you're headed in the right direction. I think wholesaling as a side hustle is definitely doable. I would say listen to bigger pockets podcast show 91:https://www.biggerpockets.com/... You'll get an idea of what it takes to work full-time as a teacher while wholesaling on the side. Also, visit your local REIA and try to network with other investors. You could build your buyer's list that way, while tailoring your search criteria to what your buyers are looking for in properties. If you're a store that sells shoes, you wouldn't sell to a customer who's only interested in buying shirts. Nevertheless, I hope this helps. And good luck.

Thank you @Account Closed for the explanations.

In the world of wholesaling, two things to consider are motivated sellers and equity. If I found a seller that had a lot of equity but no motivation to sell, then it would be hard to get the property under contract and close. If I found a motivated seller but had little to no equity, then getting the property under contract and close would also be difficult (especially since cash buyers wouldn't be interested). How does a wholesaler figure out whether or not a motivated seller has equity? What does little to no equity look like? What is considered a good amount of equity? What should the wholesaler suggest to the motivated seller that had little to no equity?

Hi @Cameron Braig,

Thanks for the tip! I'm definitely going to use those metrics, as I create a marketplace profile for out-of-state markets.

As an aspiring wholesaler, I don't have any assets to protect. Therefore, getting an LLC wouldn't make sense. I guess when I cross the bridge of renting and owning LTR properties, having an LLC would be more applicable. Nevertheless, thank you @Greg Scott for the awesome advice!

I'm thinking of making my first few moves which are forming an LLC, creating a website, printing business cards, and attending REIA meetings. My end goal is to rent and own cash flowing properties out of state, however, since I'm new to the industry I thought it would be a good idea to start off wholesaling (about 1-2 hour driving radius) from where I'm located in New York.

My debt to income (DTI) ratio is currently too high due to my student loans which I'm currently paying off. Hence the reason why I think wholesaling is the way to go for my situation. With wholesaling I could develop skills like marketing, negotiating, problem solving, and estimating rehab cost. I wouldn't have to worry about financing deals because of my DTI. Plus, I would have skin in the game which could help build credibility. Twofold, I could build a capital reserve and pay off my student loan debt, which would lower my DTI significantly. Finally, wholesaling presents itself as a nice exit strategy for deals that turns sour long term in regards to buy & hold investments. This all sounds good on paper, but before I could even think about networking, finding deals, and building a buyers list, I would have to consider startup cost and the cost of doing business.

As a result, would it be a good idea to form an LLC as a new real estate investor/wholesaler? Is starting an LLC necessary to conduct business between sellers and buyers? Would I need to talk to an attorney and CPA to better navigate the issue at hand? I'm trying to be an investor not a small business owner, so is forming an LLC even a good idea starting off? If I had to create an LLC, what would that mean for taxes? If the business didn't generate income the first 6 - 12 months, would the business still be taxed regardless of the income made, or the lack there of?

It's a pleasure to meet you all: @Wale Lawal, @Dan Wynn, @Julio Gonzalez, @Robert E Thompson, @Justin Windham, @David A Bailey Jr, @Loretta Wills, @Carter Fleck . 

This past week was jam packed with real estate learning. I can't wait to see what the rest of this journey has in store! 

Right now I'm thinking of making my first few moves which are forming an LLC, creating a website, printing business cards, and attending REIA meetings. My end goal is to rent and own cash flowing properties out of state, however, since I'm new to the industry I thought it would be a good idea to start off wholesaling (about 1-2 hour driving radius) from where I'm located in New York. 

My debt to income (DTI) ratio is currently too high due to my student loans which I'm currently paying off. Hence the reason why I think wholesaling is the way to go for my situation. With wholesaling I could develop skills like marketing, negotiating, problem solving, and estimating rehab cost. I wouldn't have to worry about financing deals because of my DTI. Plus, I would have skin in the game which could help build credibility. Twofold, I could build a capital reserve and pay off my student loan debt, which would lower my DTI significantly. Finally, wholesaling presents itself as a nice exit strategy for deals that turns sour long term in regards to buy & hold investments. This all sounds good on paper, but before I could even think about networking, finding deals, and building a buyers list, I would have to consider startup cost and the cost of doing business. 

As a result, would it be a good idea to form an LLC as a new real estate investor/wholesaler? Is starting an LLC necessary to conduct business between sellers and buyers? Would I need to talk to an attorney and CPA to better navigate the issue at hand? I'm trying to be an investor not a small business owner, so is forming an LLC even a good idea starting off? If I had to create an LLC, what would that mean for taxes? If the business didn't generate income the first 6 - 12 months, would the business still be taxed regardless of the income made, or the lack there of?

@Justin Windham