All Forum Posts by: Ray Hurteau

Good post.  Staying top of mind is difficult for many, especially those who do this part time (majority of investors).  So I think you really want to focus your limited time by finding the wholesalers who are at many of the meetings and generating lots of wholesales leads.

This may mean focusing on a specific market or area of your market. The one mistake I made when starting was to try to say I'd cover a very large area. Focusing on a smaller area allows you to learn that market much better and be more confident in ARV's, etc.

@Alex Cuevas - dropbox and google drive are good

nice work!

hey @Alex Cuevas welcome and congrats. i assume you had your real estate attorney draft up the P&S terms you described above. i love it! very creative and it must have been the right seller. no holding costs will allow you to compete against the cash buyers - because that is essentially what you achieve without needing the cash. please keep us posted on this project, i think it's a great example of creative REI. best of luck on the renovations. do you post any photos anywhere like facebook?

@Josh Lamm yes, Dorchester.  I know some people say don't tell them you're the owner.  It's hard not too when they make their rent checks to you and you're doing maintenance.

I think owner occupied is a great way to get your feet wet. The Boston market is almost near impossible to find a deal on the MLS. Best advice is to work with an agent in the area who knows the area and knows what you're looking for.

I can provide a REA referral for Dorchester if you're interested (it's 1/3 of the whole city of Boston and there are some nice areas - don't believe that all of it is bad - it's not!)

@Ted Shackleford - your best bet is to call a number of local commercial lenders and find out.  you will get better answers than just posting on the site here.

most lenders will look for your credit to not show any major blemishes but they are also going to want to know that you have the experience and know-how to manage a property.

so what is you and your potential partner's experience?  if you have a specific property in mind, do you know how much it will cash flow?

when evaluating properties, any lender will want to see that you have a plan to increase value in the property (raising rents, fixing units as turnover occurs, etc) or that it will cash flow from day 1.  they will also require a 25% down payment most likely.  this is my limited experience from contacting some commercial lenders just to understand their process.  i do not have any commercial property experience, but do have a few multi-families - those loans were traditional, not commercial.

i do have experience with getting commercial loans for residential construction projects.

Hello Local Boston/MA Investors!

We are having a project tour/open house/networking event for anyone interested in following along with our current project in Somerville and learning about how to do this exact kind of project.  

The house is a 3 family that will be gutted to the studs and rebuilt with beautiful finishes for a modern/contemporary look.  All are invited - no level of experience is too low or too high.  We will discuss the project, how we acquired it, how we financed it, how we manage our contractors, and how our company started.

WHO SHOULD ATTEND?  Anyone looking to learn how to get started or looking to move up from single family flips or wanting to network with others (tradesmen welcome!), this will be a great event you won't want to miss.  You can RSVP here (an account is required) or simply show up - but registering would be helpful so we can plan accordingly with printed materials: http://www.meetup.com/Networth-Investors/events/22...

Light refreshments will be served - please note that Somerville is mostly resident parking, so be sure to give yourself some extra time if you're driving in, try to carpool, or take the T.  Also, it is an active construction site, so please no open toed shoes.

If you're not able to attend but would like to learn more, feel free to send me a colleague request.

Cheers!

Ray

P.S. - this is a free event and all are welcome to attend!  It will be a great opportunity to network with others in the Boston area!

Hi @Maxwell Lewis, welcome to the forum.  I replied to another investor looking for rough costs - you can find that thread here: http://www.biggerpockets.com/forums/44/topics/2056...

Hope it helps!  Let me know if you have additional questions.

@Rick Jones

Hey Rick, great post and thanks for sharing.  Also, congrats on the great work so far!!  You're definitely going to head in the right direction.  How comfortable are you with your overall team?  Do you have all the players for a rehab?  It definitely takes time and experience to build a good, reliable team, but it's great when you have it.

We used to do everything ourselves, mail and inbound calls.  We don't have a call center, but we have brought someone on board who is compensated for setting up appointments and when we close on a property.

Excellent work with the private investors - keep growing that and be sure to keep them safe by having conservative underwriting practices - it usually means saying no to many opportunities, but as you know, most calls are not going to lead to anything, hence the volume and consistency approach.

I think if you add properties to your list in the new markets you want to explore, you will get something - like you said, someone will get it, so why not you?  I agree 100%.

Best of luck on your current/upcoming projects and moving into the city!  If you have any specific questions, definitely don't hesitate to ask.  We are moving into new construction and continue to perform condo conversions in new boston markets.

@Josh Parra is right about the costs.  We have converted multiple 3-families into condos and those numbers are spot on.

We've spoken to others who work in higher end markets (South End, Beacon Hill, Brookline, etc.) and the cost per sq ft can be much higher.

@Ann Bellamy brings up good points as well about dealing with the city.  We are working on a new construction project in South Boston which included demolishing a house and it's probably 3-5x longer waiting for approvals, meeting with city officials, getting utility/site work performed, etc than it is for the actual building of the house.  Getting to know the inspectors, never cutting corners, and hiring competent workers with relevant experience is the only way to go, otherwise it will cost you more in time and money.

@Rick Jones If you have the funding to do one of these projects, go for it, but the competition is stiff and in an area where values are mature and high, it will be tough to get a "below market" deal.  It can be done with direct mail, but it will take time.

I also feel your estimated numbers with regards to the down payment and rehab are too low - it's really crazy how expensive it is to work in the city.  150-200k might be enough to rehab one unit if you're in the dense/difficult areas and are putting in high end finishes to get top dollar.  Consider other markets near the city to gain some experience at lower rates - there are many up and coming areas or areas that are in the middle of a turn.  We have worked in Dorchester and it's a good balance of dealing with the dense city issues, but also at a reasonable price point (relative to Boston, still way above the national averages).

Hard money on a $1M+ deal... yikes, good luck.  If the hard money lender approves it, you either are putting 15%+ down or you really did get a good deal.  Run the numbers and just imagine how much more you could get with a commercial loan.  Or consider working with another experienced developer/investor to bring a deal to the table and some cash for a possible joint venture!  It would reduce the risk of unforeseen issue due to lack of local experience but also get you ramped up learning the process much faster.  Your profits might be the same as working with a hard money lender, but the lender isn't going to help you with the project. 

What kind of rehabs have you done before?  The details in your profile were high level.  Also, do you market in-house or out-source?  We tried both and prefer the latter.

I am also interested in a referral for this type of attorney.  Thanks!