All Forum Posts by: Nayt Grochowski

@Account Closed its for you to estimate how many nights a year you will rent out at the High rate vs the Low rate. It all depends on your location and how often you can get your unit rented out for the different rates.

@Kimberly Herring @Chad C. You can download a copy here: VRBO Calculations

Hi @Anne M.

I built the spreadsheet based on other rentals I have done, but the figures for nightly rental rate, vacancy, etc came from the property management company based on similar rentals in that area they manage. This property ended up falling through (short sale that did not get approved) - but I had talked with other investors in the area and the numbers are accurate - this was in Branson MO.

@Brooke Spaulding You can download a copy here: VRBO Calculations

Hope this helps you out!

Was not sure the best place to post this, I didn't realize there is a "Diary" section while we were going through the project, I figured safest to post here since it is on the market now. Of course if you know anyone looking for a home in South OC, please share!

Once the home sells and everything is done I will post a write up of the complete experience, it was a crazy ride for our first flip project! If you are in the South Orange County area this weekend stop by to check it out, open house is Saturday March 30th and Sunday May 1st, 11:00am to 5:00pm.

More information and pictures

@Taylor Call - Problem is it all depends on the time of year - the numbers in my sheet are based on an average over the entire year. Prices should fluctuate all year round based on peak vs slow seasons etc. 

If you are only able to rent out the property for part of the year you need to research what the average vacancy is for that time and then bump it up 10% to be safe.... it is completely doable, but is just going to require much more research and narrowing down the values in the spreadsheet.

Think about what sells a house: Kitchens and Bathrooms

Put the money where the homeowners will look the most and spend the most time. Show off that beautiful tile work you spent so much money on - plus with that block window, the light will fill the bathroom so much better, where a shower curtain would block that light more. Natural light is the best thing for a room.

FYI - We cleaned up our garage floor with a strong solvent/cleaner years ago (sorry don't remember what we used, but got it at Home Depot) and it worked fine. Garage is going to end up parking cars or collecting clutter for a homeowner and is not used very much in most cases.

Just my 2 cents - hope that helps!

Thank you @Bill Gulley

The deals I have done so far for myself have been sold as-is with a Land Contract and a Promissory Note. If I keep doing these, even if just by myself, I suspect the same requirements will apply after some threshold (8 in the works right now) - appreciate the direction, time to get some more research done!

@Christian Brodin @Bill Gulley @Bryan Hancock @Steve Vaughan

Thank you all for the great feedback - and yes I do have an attorney setting up the initial JV - looks like going down this road will may be more steps to get setup. I already have a number of properties I am already doing this for on my own and have been sharing the experience with a few people that now want to join me in getting more, so that is where this all started from.

Christian - all asset management decisions will be handled by me - this is more a hands off process for the other investors. Plus, most of the time we will be refinanced out, so no choice there but to get the funds back to work - and based on most of what I have been reading, we will just take the tax hit and keep going.

Bill - as I am using a 3rd party to handle the sale of the property and setting up the note, does the broker obligation fall under them (I pay a service fee for them to handle it), or something our group will still need to do? Plus I use another 3rd party to handle servicing the note, so no problem there.

Not at all worried about the work involved in getting it setup - just want to make sure it's done correctly.

The other option here, create a new company (LP, LLC or SCorp...) with the investors that want to join and we all contribute the initial capital for our membership % - and the new business handles everything with me as the managing partner. Of course that is a more expensive setup for future groups with the initial setup, filings each year, etc - but I could see it as just be a cost of doing business and may be less complicated. I have setup and run quite a few businesses over the years so very familiar with that process, may be a cleaner way to go too... Thoughts?

I am working with a small group of investors and we are putting our funds together to purchase properties that we will sell with seller financing to generate cash flow. The plan is that my LLC will be managing the assets, basically handling the acquisition, marketing, sale and collection/distribution of cash flow. Plus when we sell a note, or get refinanced out, I will take those proceeds and get more properties back in to keep generating cash flow. This is a long term investment/hold strategy we are building up as a group. I plan on taking a fee as a % of the cash flow disbursements for doing the work, along with putting my own capital in for the initial funding.

I would also like to repeat this with more people and create new partnerships down the road. Want to make sure I am setting up the JV correctly between my LLC and the other people/LLCs and that it is easily replicable. Each partnership will be its own group, the assets of each would be completely separate from each other. Once a group is formed and each person has their % of the relationship, it's locked in.

Some of the key points for the partnerships to still be worked out:

• How to exit the partnership – plan is to put a value on the assets/cash we have at that time and allow the other members of the JV to buy out the partner. And if current partners don't have capital to buy out, open it up for a new partner to replace them. Anyone have other ideas/issues with this thought?
• Taxes on sold properties that we then reinvest into more – Do we take the tax hit, or is the purchase of additional properties counted as a business expense, or if not is a 1031 possible. We could have this happen multiple times a year too, so looking for something not too complex.

Obviously the JV has much more in the agreement, but these are the main areas I am not sure about.

Has anyone set up JV groups like this and have experience and tips you would be up for sharing?