All Forum Posts by: Nicholas Delgado

Hi Jon, im interested in joining the meetups/email list. My email is [email protected] and i look forward to the chance to meet you someday!

Thank you for the feedback @Caleb Brown @Mike Eichler & @Bob Metry. I value it all and we are deciding to go ahead and sell with option 1. Best of luck to you all for a prosperous 2022!

Looking back on this timeline, i was so naive haha and ambitious, which is fine, but learned plenty along the way and will allow much more wiggle room for my partners when i present my underwriting to them. Luckily, they were all patient and secretly knew the timeline would double from the start so nobody was pressed to cash out early. Live and learn

@Lynnette E. you are so right in this and i found out the hard way. Crazy how little respect that industry has for their clients. nonetheless, i am getting through it and managed to stay on budget without having to redo anything. Great insight and i will never forget this lesson.

Hello BP, 

I am looking for some guidance on a recent project i have been focused on. So i am 95% complete with my first flip and it was an absolute home run! Not bragging, but i got pretty lucky with market tailwind as well as purchase timing. Bought in at $357k @ ~80% LTV, so $76k down put in $135k in repairs(construction loan), all of this bundled for a $423k I/O loan at 9.25%.

Side note that may impact decision making: i am the GP of the deal and have 33% stake, deal is split three ways with other partners (33.3, 33.3, 33.3) Yes, i know this structure was not optimal for me personally, but it was my first deal and i had to make it happen. Also, we cannot 1031 the property because i am in direeee need for cash at this point LOL credit cards are maxxed.

So here come my options:

1)Stick to the plan and sell the house for about $800k (very similar comp under contract at 799k this week in only 4 days, which pretty standard right now) 800k-423k=377k gross profit divided three ways; we each cash out 119k after my management fees on a ~25k cash investment.

2)Cashout Refi and Airbnb the property. The house is in a super hot short term rental area by the beach, so there would be strong consistent demand. Refi would likely get appraised at 700k conservatively (*facepalm at appraisers lol*). Assuming 80% LTV, new loan at 560k-423k to pay off hard money = 137k and we each cash out $45.6k on our 25k initial investments. Our STR market allows for $300 average daily rate conservatively, so at the most conservative estimate of 50% occupancy thats 4500$ gross monthly then subtract about $3000 for mortgage (PITI) and we each have $500 of monthly cashflow as a base case. Some months would be 85-90% occupancy, so $1,550 each as a peak season number. And strong chance of continued appreciation into the 1mil$ valuation range after about 3-5 years pending a downturn.

3)Hybrid model: We airbnb the place for the next 6 months until our one year hard money loan term comes due and create strong cashflow close to the high end of the estimates as it is peak season. And then we sell after the 6 months of airbnb, where we would likely still be able to get the 800k sale price pending any severe downturn.

Thanks for sticking with me through this essay BP and i appreciate all the insight, knowledge and courage this community has given me! please let me know if i have any large errors in my calcs as well.  What would you do?

Hello BP Landlord Community/ Legal Team,

I have a housekeeping question for y'all. I do university rentals to athletes at a school that I have a few connections to. Anyways, it came time for yearly rent increases (3%) and one of the families, who occupies the master bedroom at a higher rate than the other two renters wants to pay in advance the entire next years rent if he can keep his payment amount the same. Obviously, I would like to accommodate that request.

But my question is, what is the most judicial/legally sound way to make it happen?... They are currently all signed on different leases, but the entire monthly lease amount is shown on each lease ($1300). I have it that way to create some type of accountability between the roommates to deter vacancies. So, if I allow him to stay at his current allocation, then the whole increase (40$ overall) burden is put onto the other two roommates, and essentially everyone will be at the same rate, even though one gets the master. This doesn't sit well with me and likely wouldn't with most people, understandably.

If I rewrite the leases to show each persons portion specifically, then deposit collection/dispersion becomes inefficient and will have to be addressed yearly with turnover, also vacancy losses come back into play (because they are not all signed under leases showing one total amount).

Does anyone have any experience with a situation like this, or have a creative alternative that i have not yet thought through yet. Or perhaps am I completely overthinking it and there is a simple solution? State is Alabama if it matters, landlord friendly state.

Thanks BP,

Nick

@Philip Coiro thank you sir, i was hoping someone would give me a kick in the ***. I aim to finish faster, and will make it a point. Also, thank you for the insight on countertops and cabinets, will be applicable and helpful.

@Ryan A Rodriguez-Wiggins i have my fingers crossed because my team is untested to this point, however it is made of friends of friends that i have known for years growing up, so i hope that relationship is enough to hold accountable (as well as well documented scope of work and incentivized payment schedules.)

@Tony Borman @Evan Polaski I have one more question for you guys. Do you prefer to allow subcontractors to pull their permits, or do you prefer to file these yourself? Thanks

@Tony Borman Thank you; great idea. A Gantt chart would definitely help me with some visual clarity.

@Evan Polaski good point noted about the budget workers time management skill. Also, fascias are rotted and roof joists are in healthy shape. Gutters are new and salvageable. (i hope, but as you illustrated there's plenty of unforseens) thanks for shedding light on some overlooked possibilities.

Hey BP,

I'm finally doing my first flip. I started off with two out-of-state SFH university rentals to get my toe in the water. Now, I found a hell of a deal in a hot market, and its just about closing time. The project is going to hit the ground running. I have allocated 3 months to this flip and obviously sooner is better, but that is what was budgeted (feel free to give advice on how to improve my timeline). I am listing the projects below and separating them by weekly checkpoints from date of purchase. Again, this is my first flip, so if any process can be maximized better, I would be super thankful for words of wisdom.

Week 1- Demo: 

• -Two day rental of Bobcat to remove trees, large decorative rocks, and clear backyard and sideyard fences.
• -Haul away yard debris
• -Mow and spread grass seed on entire yard.
• -Demo kitchen cabinets
• -Remove all fixtures
• -Demo old bathroom tiling and fixtures
• -Have digging/tunneling prepared for sewage line replacement
• -Pressure wash outside of house to prep for paint

Weeks 2 & 3

• -Complete sewage line replacement
  
• -Begin Landscaping design
• -Replace entire homes fascia boards
• -Remove popcorn ceiling texture

Week 5

• -Have exterior of home painted
  
• -Roof leaks should be repaired by now

Week 7

• -Have new lighting and fixtures installed
• -Tile Flooring throughout installed
• -Replace drywall boards as needed
• -Paint interior

Week 9

• -Kitchen cabinets/countertops and island installed
• -Bathroom tiling completed
• -Shower doors installed
• -Detail work inside
• -Electrical outlets upgraded
• -Front Door replaced
• -Vanities/bath fixtures installed

Week 12

• -Install appliances
• -Install Fencing where needed(using about 80% of the neighbors white pvc fence as a privacy, will match)
• -Paver driveway to be completed

Week 13

• -Stage for marketing photos and open houses
• -Accept offer at 110% of list price

I know this is a brief run over of the work, but any advice in planning/ executing is appreciated. This will be my main focus as work, so I will be at the property daily completing what I can and overseeing subcontractors. Project is in South Florida, i will be sure to document for the community as it progresses. Thanks everybody for making this the best community around!

-Nick