All Forum Posts by: Nik S.

Meet with a qualified local commercial broker. Things are selling pretty well in this economy! A great time to capitalize and sell your investments if it's your time to do so! They can make up an attractive memorandum highlighting the numbers etc....! Good luck! 

I second J Scott. Assuming you have a detailed scope on your work, 15% is what your reserves should consist of.

My first flip I experienced a contractor I had to fire and of course he was paid more than he should of given his amount of work completed. Assuming you are subbing everything out, this can add additional $ to your projects. Finding your trusted vendors/contractors is what will help ensure a smoother and more calculated project. Your “team” is a major key to success for your flips.

@Chang Xiong

IF possible, try and use internal funds. Hard Money Lenders can eat up all your profits and eat into your reserves if things don’t go planned. Depending on your potential profit margin spread, be careful where you get your funds from. You learn a ton on your first one, good luck and make it happen!

@Jeff Quinlan

Ideally a minimum of 10% CoC. Cap rates are currently compressed however if you can safely gain 10% on your money, your doing good. Like others have mentioned, It depends on location and asset class. If your buying an A class apartment building, 10% generally won't be possible. I am speaking from

C/B class apt units.

@A Schwartz

Lenders first evaluate the strength of the property. Then they evaluate borrower strength. Depending on the deal of course, expect to see a lender require 20-25% cash down. Cash Reserves will be required as well.

@Marisa R.

That’s awesome! Key is “cash buys”. A lot of us are focused on leverage. I think the strategy can be taken two ways.

Cash buys are great and you don’t “need” as many doors to achieve your number...where as leveraging you try to gain more doors but it limits cash flow due to mortgages. The equity build up is great for leverage (Someone else paying your mortgages) however paid off properties create higher cash flow which can ultimately be reinvested into more cash buys.

I gross a lot more monthly but my mortgages eat a big chunk into the cash flow.

Can you tell us the breakdown of your portfolio? Are you buying SFH's, commercial, multi?

Regardless, congrats! Keep going and get as much passive income as you can!

@Jerryll Noorden

Amazing, you found a special route! Your finished project and numbers were awesome! Super congrats on your success!

@Caleb Heimsoth

The whole 70% rule doesn’t apply to flips in this current market. I’d love to be able to apply that however margins are way tighter now, supply is low and prices are high. Great for a back of the napkin, quick analysis. However if you try and make offers using that principle anymore, you’ll be on the sidelines.

@Mya Toohey

Congrats on your lucrative vehicle! I’m sure there wasn’t a “highest & best” situation either....gets old fighting each other! If I were you, I’d buy another one! A few yachts could help sail you to financial freedom!

@Shane Craig

Asset class CAN help mitigate complaints. I invest in C/B apartment buildings. Complaints are going to happen. Issues will arise. It’s all part of the business. Like others have mentioned, I use a PM company so I don’t hear the complaints, only major ones and that’s not too common. A solid PM will be tough with tenants and not take their BS.

For me it comes down to wanting to have 100+ SFH's OR 100+ apartment unit doors (I wouldn't buy a property unless it has 20+ units). Economy of scale. To each their own but having a ton of SFH's gives me serious anxiety.