All Forum Posts by: Account Closed

Ok, @Khelifa Ahmed, then how does the property play out as a BRRRR? Went rent could you reasonably make, how much would repairs cost to get rent ready, and how much could you refinance for in 6-12 months?

@Khelifa Ahmed, I am no expert and I am actually in the middle of my first flip in Baltimore right now. For this reason, I can understand your uneasiness, as I feel it everyday too. While I may not be able to give advice on the same level as the other member on this thread, I would like to try. To do that I would have to ask you what your exit strategies at this point look like? If you sell if how much can you sell it for (reasonably)? Is that more than your debts? How much work does the property need to be rent ready? Assuming the numbers don't work out for a profitable flip? What other exit strategies did you consider before entering the deal?

Hope I can be of some help!

Hello BP Community, 

My partner and I (2 people) have a property under contract and are working through the closing process. The property is a SFH that will be flipped. We are using hard money and purchasing through an LLC. The title company asked how we wanted the property vested, and I am not sure if it should be Sole Ownership or Tenants in Common. I can see it being Sole Ownership because the property will be owned by the LLC (one person/entity) not my partner or I. I can also see it being Tenants in Common because we both have vested interest in the property. What are the consequences of each choice?

Thanks in advance.

Hey Adeiza! I am interested in learning more about this property. What is the ARV? What neighborhood is it in? What is the rehab budget? What are you asking? Please send me information on the property: [email protected] Have a great day!

I was wondering if any Bigger Pockets members would be willing to share any construction estimates they have received in the past in the Baltimore Area? I figured any construction estimates from the last two years in the Baltimore area would still be helpful. I thought this would be a helpful way to help newbie investors analyze deals who aren't familiar with construction cost estimating, and help current investors make sure they are getting competitive prices. For any who shares an estimate they could black out any personal information or even the contractors name if they felt that was appropriate. 

I'm one of the new investors who feels a little uncomfortable with construction estimating! So I would be very grateful to any seasoned investors who are willing to share!

Thanks!

Good Morning Biggerpockets community!, 

I humbly come to you again seeking guidance wisdom, and referrals! 

Today, I am looking for a real estate experienced attorney in the Baltimore, MD area. I would like to work with someone local who has experience in the Maryland legal system, the closer to Baltimore City and County the better. I would love to hear about anyone you guys/gals have actually worked with in the not to distant past. I am looking to meet this attorney to review my partner and I's (@Kanwar Sodhi) operating agreement for our LLC, and to discuss asset protection and proper entity structure for our business. We will be doing our first flip in Baltimore City/County this year and we would also like an attorney who could help us navigate any other legal issues that may arise in this process. This our first flip, so what those legal issues may be we don't necessarily know. We would like to learn what they could be, how to plan for them, and how to act should they arise.

Any information or comment is appreciated!

@Michael Plaks I'm in no position to dismiss any experienced REI professional's advice, so thanks for providing your input.

Taxes are something we have been thinking about. We need to met with someone to nail down the exact numbers, perhaps this is a reason enough to consult with a CPA now versus later. I am estimating at least 30% of our profits to go to taxes. 

I understand the $100/hr philosophy, however it is something that I find a little difficult to aim for without experience in flipping. Without knowing how many hours my partner and I will have to put into a flip, calculating an hourly rate is difficult. Therefore we are setting a desired profit and timeline as our goals, of course doing our best to accurately consider all cost and take into account Murphy. Once completed we could back calculate our hourly rate and consider how to improve it if necessary moving forward. 

@Michael Plaks, ok so let me see if I can summarize what your saying here. We need to properly account for all cost, closing cost on both ends, realtor fees on the sale, points up front from the HM lender, holding cost (interest payments on the loan), potential loan extension cost (1 point in our case). Then we need to thoroughly vet our ARV and rehab values, and even then add a contingency on them (say 10% on both). Account for self employment taxes, approximately 15%, and then we can get a somewhat reasonable estimate on our potential profit or loss. Finally, assume because we are beginners we will mess up in someway or miss an opportunity somewhere, and we should pad are numbers even further, say $10,000?

In response to your last comment, that in a best case we make 20k for a half a year of full time work. We will hire contractors for almost all of the work if not all, so is this really full time (40 hours a week)? I understand we will still need to put in time to talk to supervise the contractor, visit the site frequently, sell the house, any paperwork we need to do, inspection submittals to our HM lender, etc, but should we expect this to take 40 hours a week each? Even it does, 40 hrs/wk x 26 wks = 1,040 hrs    $20,000/1,040hrs = $19.23/hr. Not getting rich that way, but better than minimum wage, and this would be on top of our current salaries. Now, if we can manage to spend only 20 hours a week each managing the renovation, we jump to $38.46/hr. If we make $20/hr and gain an incredible amount of experience and knowledge in the process, that is worth it to me. We don't plan on getting rich on this deal, or even flipping houses long term, we want to build capital to purchase buy and holds. I do value your advice and information.

@Michael Plaks, I should clarify, those numbers are not from any deal we are considering, I was throwing out the ideal numbers in a deal we would like to see. It seems that you don't think our ideal numbers are something to strive for, I appreciate the feedback. Your assumptions about rehab length, closing cost, and hard money cost are in line with what we assumed. I will note that in the deal I outlined above, the hard money and holding cost for us would be 16K ish, given our current lender. Also that most of the deals we are actually looking at have an ARV closer to 220k, I was just being general in my original post. If you still think are deal parameters aren't setting us up for a potential profit, I'd love to hear your thoughts.

Best, 

Patrick

@Ned Carey, thanks for the reply and recommendation of a good CPA! I was probably not clear enough in my original post, I do not intend to do my own taxes come tax season, we will hire a CPA. I was just wondering if consulting with one now was worth the time and money. 

Best, 

Patrick