All Forum Posts by: Charlie MacPherson

In addition to local / regional banks, be sure to talk with local credit unions too.

First, thank you for your service.  You really do have a grateful nation behind you!

Second, don't ignore USDA Rural Development loans if you're going to owner occupy for any time at all.  These are available in less densely populated areas of the country.  There's an online map here: http://eligibility.sc.egov.usda.gov/eligibility/we... You'll be surprised at how loosely they interpret "rural".

You might want to save your VA benefit for your own home. Or not. Either way, check out USDA. I'm using that to move renters into homes they never thought they could afford because of the down payment.

Other than that, keep your overhead down.  No unnecessary debt.  I wish I had learned that at your age!

- Charlie

Right.  I routinely execute a buyer's broker agreement with clients and charge them nothing.  Our fees are always paid by the sellers.

Everything is explained in excruciatingly thorough detail and clients receive copies of every document.

I suppose it happens in every profession.  I just saw a news story about a dirtbag physician who gave patients unnecessary chemo.  But Realtors in particular don't need the bad press.

I heard of a local real estate agent that was charging a buyer's broker RETAINER of $15,000.

Legal? I suppose so.  The parties signed the contract.

Ethical? Hardly.  This jerk was targeting recent Haitian immigrants who probably had no idea that this was virtually never done.

It really irks me that I spend 7 days a week working as an agent, and jerks like this are out there giving agents a bad name.

The bus can not hit him hard enough.

I met with a potential client this morning who is about to list a 2 BR / 1 BA upgraded cottage at the junction of a river and the Atlantic ocean.

In the interest of full disclosure, I do NOT yet have a contract to market this property, but expect to have one within a few days.

This home has an astonishing 0.27 acres of waterfront land with spectacular ocean and river views.

It seems to me that the highest and best use is to tear down and build a 4 BR / 2 BA, ~2000 SF with upgraded decks to maximize the views.  

You could also rehab and flip.  It's currently 813 SF and has a 1 car garage under.

Of course, your own due diligence with town officials is required.

It's in a flood zone - most likely AE and with a tear down can probably be elevated above the flood plain fairly easily. The seller's niece (who has POA) tells me that the basement gets a small amount of surface water in flooding periods. Perhaps an inch or two according to her.

As a bonus, it's already on town sewer (no worries about private septic) and has natural gas.  Both are big selling features in this area.

COMP: 12 Parker St, Marshfield (Rexhame), MA.  4 BR / 2 BA, 1878 SF, 0.13 AC (less than half the land of the subject property). It sold in Jan 2015 at $635,000.

The client is not desperate - it's not a wholesale deal.  They have already turned down $320K.  However, they have prioritized closing quickly over maximizing income.

If this sounds like a flip or tear down that interests you, please message me ASAP through BP or text 781-412-4151. We plan to go to MLS shortly, unless we have an interested investor.

- Charlie MacPherson, Realtor.  Lydon Real Estate & Mortgage
Norwell, MA

I'm a Realtor just south of Boston and have a client who has identified a 3 pled that looks attractive.  He will not owner occupy so lenders are requiring 20% down.  He has 5% and is looking for alternative financing. I've advised him to find a portfolio lender, but I'm not optimistic.

Any other suggestions?

Thanks in advance.

-Charlie

UPDATE!!  The seller now appears willing to sell at $285K.  That's another $25K that drops right to the bottom line.

Acquisition $285K

Repairs $65K

Taxes $1400

Insurance $2000

Interest $18750

Commission $21,750

Closing $5000

TOTAL COSTS $398,900

ARV $435,000

Profit: $36,100

With that change, would you do the deal?

Thanks for the feedback Shaun.  It was looking better before I started adding back the carrying and financing costs and I was starting to talk myself out of the deal anyway.

I just wasn't sure whether a nearly $30K profit over 4 months would be worth it for some  that would be the Prospect #1.  

Prospect #2 has his own rehab crew, so he would't pay the full retail rate on materials and labor.  As I'm just starting out, I don't know what that would look like, but I'm guessing the rehab cost with an in-house crew would drop by perhaps $25K.

I forget which podcast I was listening to, but one of them cautioned against using "eraser math" - where you just start talking yourself out of certain expenses because you REALLY want the numbers to work.

Again, thanks - I sincerely appreciate the advice.

I'm a new Realtor and want to dip my toes into the world of flips.  I've identified a property and have talked about it with two potential buyers.  One has said there's not enough profit. The other may present an offer - at least I'll earn a commission.  

But I'd rather flip it myself - if I can figure out how to do it without any of my own money.

Here's the overview:

- The sellers are not in any hurry to sell, nor do they need the money.
- 30 miles South of Boston MA, 1250 SF 4 bed 2 bath cape, built in 1950 and never updated. 15.6K square foot lot.
- 0.2 miles to beach but not in a flood zone.  No water views.
- Exterior is a disaster.  Needs new roof, shingles, trim, deck and chimney.
- Purchase price $310K. ARV between $425K and $440K, depending on finishes and appliance selection. Based on the modest style of the home, I'm leaning more toward Home Depot appliances and finishes than luxury.
- Renovation includes making two 1st floor beds into a large master with an ensuite and expanding 2nd floor bath, plus paint, carpets, etc.

- Prospect #1's contractor's estimate is $60K.  I later ran it by a local hard money lender who after a quick look at the property says $73K.  Both include a $5K cushion.  I split the difference between the two estimates.

Here's how I see it using a 15% interest rate, carried for 4 months:

Acquisition $310K

Repairs $65K

Taxes $1400

Insurance $2000

Interest $18750

Commission $21,750

Closing $5000

TOTAL COSTS $423,900

ARV $435,000

Note that one of the Prospect #1 has a lender who will charge no interest and split profits 50/50.  That's $18750 that drops to the bottom line for a $29,850 net that they would split.  

The other potential buyer - or potentially me if I can figure out how to finance it - would expect to pay hard money rates.

So I'm hoping for a little guidance here.  Would you do a deal with these numbers, or is there just not enough profit?

Thanks VERY much for any advice!

I'm a new member here and a Realtor.  I have a 2 family duplex that I've listed and can promote it as a 1st time buyer, owner occupied or to investors as a buy and rent.

Using conservative income and expense figures, I come up with an 8% cap rate for a buy and rent.

Am I in the right ballpark for investors?

Thanks for any opinions!