All Forum Posts by: Peter Mckernan

Another option as you mentioned in your question, partnering.. If you find a deal and it is really that good, then you can bring it to a family, friend, or person you met that is an investor and see if they will partner with you on the deal. I do partnerships many different ways, some I split the equity on the sale; I'll bring the deal, and partner with the person investing because I brought the deal to them. 20/80, 10/90, 40/50, etc.. Whatever you see fit, there is a lot of money for deals out there, the deals are harder to find. 

I would agree with Chris, I would not use debt to cover all costs and then hope to get a good pop on the sale to cover all the debt, payments and still have some in the end to make a profit to do it again. If you are going on your own, I would save up and then one deal is done move that money to the next deal and so on.

For backups you can use spokeo and you can also reach out to a title rep you know in the area they can get it for you too

I would get a few different contractors out to some properties and get the bids done for you, then you do this on the next and the next project. After a little while of this you can slow down and just use the one contractor you have gained a good relationship with and know their numbers on rehabs. It gets to a point where your rehab costs for you and your projects are known before the contractor steps into the property. When you get a deal sent to you, you know that the price is going to be X for rehab. Also, don't go off any other person's numbers that is an investor. 

For example, John down the street bought that house for X and put in 30K, and then sold it for X. You don't know what material costs were, what labor costs were, or John's scope to flip the property. 

The ARV, this is a learned ART.. You need to work alongside a realtor who has experience in working with investors, and maybe has done projects for themselves too. They will help you get the ARV, and after time just like the estimate for rehab costs the ARV/comps will be easier to know.

Great to hear you are finding a place and getting in touch with a possible Co-host.. My wife and I used to do flips in this area, and I have a couple listings along with long term rentals I manage in the area..

For the co-host, they typically do not handle permitting and other items like that (this can be agreed upon between you and the co-host. One thing the co-host will do is give you insight on what to do to get the property up to par for listings it like you said landscape etc. 

Since you are looking out there to buy I am guessing you are working with an agent that may have a lot of these resources too. Also, the agent as Rene said should be a good investor friendly agent too. These are key aspects of working with an agent especially in an area like that with the STR market. This agent might even have a couple good co-hosts in that area for you to connect with as well.

I would use this platform to find people in your area and reach out to them for a sit down for coffee, or see if they are going to any local meetups. I would pinpoint investors that are fix and flip investors and reach out to them. I would also be going to every local meetup you can to meet people in your local market that are doing these exact things. There are three different roles while flipping or rehabbing a property. One is the money person, other is the deal finder, and the other one is a project manager. If you talk with someone that has been doing this for a long time in that market they have experience in all three categorize.. I would tell you the best one that everyone is always looking for is the deal finder, so if you can be a go to person on deals you will be a person people are willing to partner with on deals.. Deals are hard to come by in any market, and fix/flip investors always want more good deals, so this is your big value add! 

I would stick to something that can be replicated on each flip when you are in a market like this price point. If you are in 450K market, check comps to see what is selling for rehabbed properties in the market you will be flipping in. This will give you a base for what you need to put in to get the best value out of your properties when you are checking ARV and getting the sales price you want along with selling quickly.

Just bought a place in an HOA where the HOA is under insured significantly, no litigation since we always check for that on every buy... This put us in a significant disadvantage on selling, buyer has to have 20% down and buyer needs to use a Non QM lender too instead of a standard back or broker... The sale of the property has been delayed and harder to sell than we expected.

This questions is the same question as getting your real estate license when doing flips, you have access to the MLS, you save money on the commission, and you have a little bit of a competitive advantage over the next person that is not licensed. I would say I have clients that don't have either license and they do great even with paying a contractor and agent. I also have friends that are licensed agents and flip properties that do great. There are some I know that do have their GC license that flip too.

The slippery slop in both situations is that I would suggest sticking to one thing and not spread yourself too thin. For example, sometimes as a GC a person you know will ask you to do a job, you say to yourself, this will be quick and I'll get a little capital for the next deal. This situation can compound to you doing more jobs and getting more capital for the next deal, but then losing sight of really why you got the license which is saving money on flips and doing more of them because the margins are so great for you being licensed. Just make sure you stay the course if you do get licensed and flip.

Side note this happens to realtors too that flip. They are like, oh I can do this deal, great numbers, and the next deal and so on.. Meanwhile, their mom wants to list a house and their friend wants to buy a house at the same time (taking their eye of the ball).

Not sure if Goosehead is in your area, but a broker like someone at this company can really help you in challenge times for insurance like this current market with so many carriers dropping out completely or raising rates on everyone. 

This cane happen really anywhere.. Couple things to do..

1. Get architect into the house when you are in escrow, get all drawings and site visit done while in escrow along with prep to submit once you close 

2. Once closed, get the grant deed and submit to the city with all items day one of ownership 

3. Do not just allow one person to keep an eye/contact the city. You need to have two, one is the architect and the other is you/PM. There are many times the architect/engineer gets busy doing other jobs and forgets your plans at the city or delays picking them up/making corrections 

4. Getting all corrections made at once and an expedited fashion, for example city asked for 10 things to be corrected by designer, get plans back get all corrections made within one to two days (this is a slow process at times, sometimes this is one of the biggest time killer). The time between when the corrections are presented and the turn time for the designer is really a drag (keep on them).

5. Have yourself/PM or designer pickup the plans from the architect/engineer and drop the plans off at the city