All Forum Posts by: Peter Mckernan

Couple things... The numbers what did you buy it for? Will the HML allow you to refi? I would assume they will, but some do not like doing that?

Get in touch with a real estate agent locally, and see what you can actually rent it out for right now. Pull comps, if you rent it for 1500.00 you are cashflowing 120.00 a month with all the info you gave me and including fees except if you take any fees on (water/trash etc. I would not do this on you, pass along to the tenant). These numbers look good if you can get it to appraise for 170K that is the numbers I ran it at... You still have some meat left in the deal if you can get that price, and it would give you about $14,000 back. **I did not add a management fee in there, but if you do even at $1500.00 your top end you are barely getting by....**

This all depends on what the mortgage company will do on the Refi appraisal numbers, I would bring these items to meet that appraiser if you go for it.. List of all items remodeled and how much they cost and the comps in the area (some appraisers come from out of the area and you know best what the comps are and numbers are).

Other option: if the numbers turn to be tight and you cannot refi, I would think about selling it lower and taking less on the deal to get your hands washed from the project. The HML will get to a point if you cannot sell it and will take it back from you, and sell it themselves.. This is something you want to avoid. This might be the only option depending on what the rental numbers truly look like, I would get ahold of some lenders ASAP to see what this cost looks like!

This depends on the PM that you are speaking with when you reach out. Some people are growth-minded, which means they are willing to help for a low cost, or not much compensation knowing that the more conversations they have will lead to more clients. The other PM can be a fix-mindset type of person where they are not willing to share anything unless you have a property and are willing to sign a PM agreement in the same conversation. 

You should look for an "investor-friendly" PM company that knows how it is just dipping your toe into the water of buying a home/condo/townhome.. 

this sale I hope is all done after 2 months.. But my suggestion for future listings.

Look at days on market in the area that you are going to list. I would also look at like kind properties that are listed and active in that area too. This will give you one critical piece of information, that it may take X days to get an offer and sell, and the second item will give you what your competition is right now. For example, for this one, there are 5 4/2 in my area and they have close to the same condition as mine. This will show you that people have options to go out and pick another house over your place. 

Taking these two pieces of info will tell you how long you will take to get an offer, so if you go past that you should lower the price, and then the other action item would be to starting off lower than all the other properties if the condition is better than your condition. If you are the nicest 4/2 out there in the market and all the rest have not been remodeled in say 15 years, and your property was remodeled a month ago then the price on your property will be easily justified at a higher price on the listing side. 

The two things that will determine the listing when you go to list for your specific house, it is price and condition. If you are priced well and the condition is great barring there is not a ton of supply, then you will sell quickly!  

It sounds like you have a great system down, and I am sure that you can find some handymen that are in the area doing part-time work and then working at a day job that could be pushed into full-time work on your properties. That would be a move for you that I would look into. I would use a service like task rabbit or Thumbtack to see a handyman, get them out to the property and get them to do some work. Then you can see how they are getting their income on a conversation. The reason I say this is that I just hired a handyman off one of these sites, they did some great work for me and the guy is doing handyman work and working semi-full-time. He would love to go full-time handyman work if he got the right gig. 

I would look at people that are handyman over anything else, contractors will be used to getting more money and the amount you would pay them would either be too low, or the they would not conform to your work/company. The other challenge is that their work might not be up to par for what you are looking for as well. 

I agree with Greg, you could first talk to the contact you have been working with on this so far, see if they can change it.. If not ask to speak with a manager. And if not then just go get a public adjuster. Insurance companies want to fix it the cheapest way possible, and their goal is to minimize out-of-pocket expenses like this one.  Your job is to make sure they are covering what they need to cover for the property. 

I would agree with Drew, and I was just on a call with investors yesterday for a mastermind I am in. The guy who runs it lays it out like this..

1-5 rentals you are still doing okay, have more stuff come up between all rentals the closer you get to 5 or at 5. The 5-10 it gets heavier and a lot busier, and 10-15-20 it really is untenable to self-manage especially if this is not you main business like a person buying their own rentals and building it like a small business. 

A manager will roughly cost $100-$150 a month to take over a unit (it could be more or less in your market) and manage the units. So, if you have 10 units and you are going to pay $1,500 a month and you are working on an active income job, too, this is an easy switch due to the labor mentally and physically (even if it is just phone calls) to get these rentals running as a well-oiled machine.  

The time back will free up more time to increase your active income, or acquisition of more rentals to get you more cashflow (passively or actively). A PMC is great to use not only for all these items but also really being a trusted source for vendors too etc. 

Looks like two 2x4s put together. If it is that, then just replace the old one with a new one you should be good to go. 

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.