All Forum Posts by: Peter Mckernan

Really just look at the lead quality when getting into a lead source, but typically it's not the lead quality. Unless you are getting leads that are a 25 year person renting and do not own property, the lead quality is not the problem. For most, it is the follow up. You need to follow up and follow more. I listened to a direct mail marketing owner on stage about 6 months ago, he said, we can mail to all the people you want with the best script, but if you do not follow up you are going to lose money and never be profitable. 

So, you need to try them all, see what works in your area by putting systems into place to follow up and actually convert leads. Oh, and create the skills to convert leads too. 

The three ways you need to convert the leads from a lead source.

1. System to follow up

2. Skills to sell 

3. Follow up by the system you created 

I would suggest really diving into your network for private funds, you can save on origination fees and even the rate. You can buy quickly and it's basically like cash. 

Some of the best rates I see today are in the mid 9s, and paying a point or point and a half. I would negotiate with the lenders to see if you can reduce your spend, but there will always be fees unless you are paying cash for the deals. 

You are talking about being apart of NAR? Is that what you are talking about. I would for sure keep the association, some associations have an overlay that you have to be paying into NAR as well. I would say if you have the option, it is really up to you if you see the value in NAR as a whole. The lawsuit that happened and ended last year has people thinking about this more and more, but stats showed that NAR had an increase in members last year.

The other option is that there are a couple other large brands popping up that will do what NAR is doing and you can sign up for them for free.

 Annnd they are gone 

Yes, ask your broker how they would like you to do it. Also, some states E.O. could be voided doing this, just for info. I would look into that too. Make sure you know all the implications.

Hey Maddison, 

great deal it sounds like.. A couple things:

1. Repiping is going to be 13k-15K alone depending on the size of the house in OC, we just got a 2000sf house quotes for 13,000 in North OC

2. The rehab depending on the size again may be more like 200K with repiping, I did a remodel last year 1500sf, and needed a roof, panel, all siding, full interior redo and permits it cost us 218K

3. For rehab costs I would really suggest doing the rehab with your own cash.. But the other options are Hard Money Lender, second on a house, personal line of credit, private money from an investor, or PM from a family/friend.

These loans are good for live in flips... That is an option, the interest rate is higher just a heads up, and if you use it as a live in flip you can make it so you do not have payments for the mortgage for the first 6 months of the loan due to construction! Just for info, and a great way to keep the costs for living expenses low while doing the remodel.

**just be aware the payments not paid will be added to the loan balance, so once you go to pay it off/sell it you will be in more money**

I would first look at not doing a flip at all until your cash reserves are saved up more. Flipping is not an easy and quick task that can be done with a little amount of money. There is a lot of calculations, market conditions, money, strategy, and more that go into each deal. I would save more prior to jumping in, even if it is a primary residence, this is because the rehab is always more than you calculated. 

You can use an FHA 203K loan and the conventional construction loan to do your rehab, these take longer than you expect as well. Sometimes these purchases, or refinances take 2 times the length you would think, and sometimes 3-4 times. I have a client that did a conventional construction refi and it took him 7-8 months due to the city permits and all. You really need to have your ducks in a row when you do this because you are not only answering to a contractor, your HML, or you bank account by pulling funds out. These loans are more time consuming, challenging on documentation, and other red tape than you can think of to be honest.

I am 100% in on advocating for doing more rehabs and leveraging Fannie and Freddie guidelines to do it, but you need a lot more stuff on these loans that will take you longer to do that is out of the ordinary for rehab/flip. 

I would start to look for another contractor in that area with references as soon as possible, this sounds like even with a clear define plan, the contractor will do more of the same. I would be sure to document the slow progress and continue to monitor for the next week, but if it is the same by the end of this week I would have 2-3 quotes from other contractors ready to finish the job. 

Biggest advice I would give would be to jump in with an open mind, and also I would look to join a team if I were you. I did not do this and looking back I would have done it to get more experience and gain the knowledge quicker. You can get leads, get training/mentorship, and fast forward a lot of success by joining a team on your first brokerage you join.