All Forum Posts by: Philip Joseph

I’m taking another BiggerPockets member advice and always tag teaming with a local for my first purchase in any new area. That way I will get connected with local contractors and another investor who will more than likely help me later if I need help.

And yes, paying for a home inspection is always worth the up front cost.

Cajun

Hey,

I have someone who would like to partner with me for one flip.  They would buy the property, I would lead and fund the rehab and the split on the sale would be 60/40, 60% being my cut.  Does anyone have a sample partnership you've used on a flip and willing to share?

Philip 

@Austin Sanders this is normal in our area. My electric bill is normally $100+ more in Jun-Aug. unless the owner made some recent changes to the place, it’s probably the A/C usage.

I just spent Saturday driving for dollars and two of the places I identified where owned my mom & pop investors with over 50 properties. Seems like mom & pops are still doing big things.

Tim,  

Lots of advice on financing, so let me help address finding a contractor.  While you are getting your finances right, you should be visiting new home construction sites.  If a crew is currently working on the framing or roof, go and find out who is in charge and let him know you have some work coming and you will need to good contractor.  I've found good framers, roofers, plumbers, electricians, masons, sheetrock guys, and floor experts just from going to sites and asking around.  You cut out the middle man and build relationships with folks who likely have more time than the general contractor.  

I am trying to pull money out of a property that is completely paid off and I'm running into issues.  My normal institutions would not do a home equity or cash out for a rental, so I decided to try Rocketmartgage (RM).  RM set everything up for me to get $60k, but the property just appraised for $73k (disputing this as comps have sold for $85-$100k).  Once the appraisal came back, RM increased the closing cost by $3k, so now it's almost $7k closing cost for a $60k loan.  Oh and they would only do a 12 yr loan period, 15, 20 or 30 years was not an option.  I'm about to call it off, but before i do, does anyone know another option?  Do you think i would have better luck with a local bank?  Note, I'm willing to take to a smaller loan (i.e $50k which is 70% of the appraised value), but RM said that is too low for them.  

Philip

I've had two dealings with wholesalers the past month since I've gotten back into investing and both times it didn't seem to be a good deal. In fact, I purchased a better deal two weeks ago straight from the MLS. The 1st could have been a fair deal, but it required a significant amount of work and if I was off on the estimate by $10-$15k, I would have overpaid. The second deal was ready to move in, but both of the agents I work with said the asking price was above current comps. And to make matters worse, the rent they said I could get was about $100 higher than equivalent comps. Have others had similar experiences lately? Is the market so tough that even wholesalers are having a hard time finding deals?

Cajun

One thing to consider if the property is near the university, is do you want to rent to college students.  If so, you can usually charge rates that match campus apartments, but you will need to furnish the apartment.  For example, my 2/1 would normally rent for $600 per month, but once furnished and fully converted, I rent each room for $2,200 per semester or $8,800 total for one year (not counting the summer months).  Normal rent is $5,400 for 9 months.  Now there some cons to this approach, but it's a cool option in a college town.  

I have a closing on 1 Sep where I will net $10k, then another closing for a property that I am purchasing for $45k on 16 Sept.  My question, is it worth the effort and expense to do a 1031 for the $10k from the first sale to use for the second sale? With it only being $10k, I'm not sure if it's worth the effort. 

Thanks, Cajun