All Forum Posts by: Neil Metzger

LOL - I hear you,  I sort of expected that to be the consensus, just figured maybe there was a way to get it done that wasn't too messy. 

I know the answer as I am typing the question, but thought it might be worth tossing out to more seasoned flippers then me....Trying to get a couple of my guys into our next flip prior to closing on it. The target home is not being lived in; trying to figure out a way to get the seller (FSBO) to allow us access to the house to begin work before we actually close on it. Combination of factors led to this, we finished a flip early, had a bit of delay in my private lenders access to funds, appraisal delay, yada yada yada. We have a pre-approval, and I am not concerned about getting the deal financed. I hate to use cash, but if push comes to shove we could just buy it.

Anyone ever come up with an elegant or easy way to do this? 

Congrats Richard, looking forward to helping you out with these properties!

Eric,

Real estate is tough, but if your risk tolerance is high, and you have a 780 credit score, you have some options. I had a client work with a group called Seek Capital in LA; they are pretty good at securing credit for business startups, so you would need to set up an LLC which you would likely do anyway if you want to do flips. Seek will get you some credit, but it will likely be partially/all through credit cards. My client wanted to partner on a flip in PIttsburgh, but had no income but had a 760 credit score and they got her 52K. A little work netted her 30K in cash and 22K in available credit on her cards, most of which was interest free for an extended period of time. Actually a little cheaper then hard money lenders; Seek kept a percentage and banks charged fees on the cash advances.

Not the ideal way to get in to real estate, or a safe way to go, but it is an option. I empathize with being between a rock and a hard place, I was there. If you want to buy a house, then by far the safest thing to do is get a job, keep your savings in place, and use your good credit score to qualify for a house. But if you hate your job, have a high tolerance for risk, and want to go all in.....

Once you have funds secured, you really need to partner with someone that has some cah/credit - or enough credit- to ensure you finish the project. It always takes longer and it always costs a bit more then estimated.

I would be happy to talk to you about partnering on a flip if you are interested and have funds to invest or if you are skilled in doing the actual renovation work. I have flipped 2 houses in Pittsburgh and we are starting flips 3 & 4 in the next two weeks.

Hard money lending is an option for you to. I have worked with Lima One and Barnet Capital. Both will only deal with an LLC. Lima One is probably a better option for reasons I would be happy to explain if you like. Barnett is awesome, but you have to have cash or assets in place to establish a line of credit with them, then you pay 15% down; the line makes it real easy to do multiple flips and use them for repeat business.

Cost with Lima One will be around 3 points, 12.99 interest, 10% down payment of your home purchase and reno budget. You will have to spend about 600 on the front end to get the property appraised, and the financed amount must not exceed 70% of the ARV. They may ask to see how much cash you will have in reserve. They will give you an interest only 12 month loan, so you have 12 months to close, fix and sell the property. During the renovation you will request a draw when you hit milestones. You will pay 125/inspection for someone to come out and verify the work is done. Lots of moving parts.

Sorry to write a book, but your candor and honesty of your post kind of got me going. 

Eric,

I am late to this thread, but I live in Leesburg, wanted to get into REI and am now neck deep in Pittsburgh. Much nicer market there from the standpoint of cost, and very lucrative with returns on buy and holds . Ping me if you want to chat.

Curious what you guys think of the Pittsburgh market for rentals; any reason why it was not on the list? Prices and returns here are amazing.....happy to try to sell you on the idea of coming here if you are interested in talking to me about it. My company does everything from helping to identify properties and secure financing, to renovations, then the property management of them. Its also a great place to flip properties. 

We used a product called uTile, not available locally around Pittsburg but a few Lowes and HD carry it. Search for it on their sites and you can check it out. Looked great, installs in sheets, and a bit pricey but you save the labor cost and get it in quickly. It is a nice solution.

Nik,

I flip houses in PIttsburgh, and just started a property management business. General rate for our customers is 35/hour, no minimum and no markup on parts. We cover all the trades. This type of business helps me keep my crew busy in between flips and during down time. Shoot me a message if you want to talk further. 

Judy,

I may be about a month premature, but I ran a property management company in Western PA for over a year; we had 82 properties. I am starting a business now, and would love to work with you. I am setting up Appfolio, which among many other things will enable us to collect payment online. More importantly, i have local maintenance crew and an office manager that can be onsite. Shoot me a message if  you want to talk. FYI, we just finished up a flip in Pittsburgh. 

I would expect to charge a one time set up fee of about $200.00 and then about 8% of the monthly rent. 

For properties we owned we always had the bill(s) sent directly to us. In the lease we stipulated that water, sewer and garbage bills would be paid by the landlord and that the charge would be passed on to the tenant along with a convenience fee. Gas and electric were handled by the tenants directly. I would be careful about bumping the rent to include these services; tenants can get real careless with water consumption if they are essentially getting all they want for a fixed price. 

(yes, they are lien-able, and depending on the boro sometimes they are billed monthly or quarterly, sometimes one utility bills for all 3 services or different utilities bill for 1 or 2 of them or each of them)