All Forum Posts by: Ricardo S.

Great posts.

I'll add a few: Not underwriting post renovation property taxes for BRRR's. Property Taxes on a past project in Decatur GA went from $1500 a year to $8,000. Sheesh right? Part of how the municipalities get you is pulling permits. Thats how they know your properties condition has "improved". This is the cost of doing business.

2nd: not having security at your property during and post renovation.

During renovation: getting a wireless solar cellular camera with motion sensors, night vision and lighting or

post Renovation a Ring and or simplisafe system while your project is on the market. This vital in today’s environment.

This is useful to see if contractors come to work on time and what time they leave. Also you can see their overall productivity. See when materials get delivered, etc.

This last one is debatable but It works for me.

Not utilizing rewards or cash back credit cards during renovation projects to maximize ROI. Imagine having getting 150,000 points intro bonus for spending 6k in 6 months for Amex or Chase for example. This can easily be obtained by spending it on materials you will be buying regardless. This is equivalent to a free family trip to Europe if used properly.

Increase the agent commission on the Buyer side from the standard 3% (at-least here in GA) to 3.5% or 4%.

@Marisa JManker

Good job on the flip. A few things I would suggest because I had a similar issue when I sold my flip in July.

1. Agents are the key to selling homes and are the ones that can motivate their buyers to make the offer on your house vs another. Increase your commission to 3.5%

2. Your 4th and 5th pictures should tease the kitchen and bathrooms. Thats what sells homes.

3. Staging your flip really helps. Especially if you can stage the living area and master suite. So consider this.

4. Instead of placing motivated seller at the bottom of the listing description. Put it at the beginning. Personally I would purchase the appliance instead of a credit but I understand if funds are tight.

5. Offer 2% towards Downpayment and in the private remarks have your agent require 1% as earnest money. That way if your time is wasted that money can go towards the interest payments.

Side note: this is for anyone else reading. Guys This is why you have to make sure there is enough margin on these deals to make a profit if the market shifts because it has compared to the first half of the year.

This all depends on your budget and experience/ risk level.

Alot of these A class neighborhoods have a high barrier of entry on the purchase and deals are hard to find. Good deals go under contract within 24hours.

Despite this high interest rate environment.

And if you do land on one. I would do my best to hold it for the long term via a DSCR loan instead of selling.

There are ALOT of unfinished projects hitting the MLS due to out of state, inexperienced investors using shady contractors and having unrealistic rehab budgets. So the best thing you can do is partner with someone that lives here and has proven experience.

I just finished rehab last week on a flip a few minutes from the Mercedes Benz Stadium, 30314 Zip-code close to Mozley Park. Had a tough time getting permits approved due to arborist requirements but I got it done because having a team is the most important thing in this business. During that time, I saw a few unfinished houses hit the market in the same neighborhood due to the fact that they were unable to obtain a permit or cant pass framing inspection.

Now , if your plan is to just repaint a house and redo the kitchen like HGTV and make $50k+ thats fine. Just know that that’s unrealistic and most of the homes here are very old and require alot of work to bring up to code.

I don’t post as often but DM me if you or anyone have any questions.

i’m an active flipper in Atlanta and Decatur area. This advice is coming from an experienced investor that have been screwed over by General contractors when I first started out.

The best thing you can do is manage your flips yourself and hiring subs and the trades for each step based on your SOW. This is how you assemble your team.

Example:

If you need a permit pulled. In Georgia there are licensed architects that can draw plans and pull permits on your behalf.

Get a sub that specialize in demo work. All you need to do is order the dumpster (Arrow Waste) and have it swapped when its full. Labor only. You pay them when the demo is completed to your satisfaction. No split payments.

Framing contractors. They provide labor only quotes and will provide a list of materials (lumber, nails, joist hangers, etc) that you need to buy for them to start the job. Materials can be ordered on the home depot website or a lumber yard. Have it delivered. You pay after the framing work is inspected. You can hire 3rd party companies or a structural engineer to inspect the framing before the trades (Electrical, Plumbing, HVAC) begin. Usually, framing inspections are done after the trades pass their inspections but if a wall is not framed correctly and has plumbing pipes in it or electrical wires guess who has to pay? You….

Siding contractors - labor only you buy the materials.

Pay when the job is 100% completed.

Roof- Usually labor and materials are included. You pay when the job is done only. It usually takes one day sometimes 2 days or so to replace a roof.

Trades- Labor and materials are usually included. You pay for fixtures (tubs, vanities, light fixtures, nest thermostats etc) Pay only after they pull their permit and pass their rough inspection. If they fail they need to pay the re inspection fee. Withhold a balance until they pass their final inspection.

Inspection- I don’t deal with the City of Atlanta inspectors. Your best bet is to use Licensed 3rd party inspection companies. Make it a habit to ask questions on the job site and be present for inspections.

Setup security cameras to monitor your flips. If the house does not have power get a Temporary power pole installed outside the house and get battery operated cameras and/or solar ones.

The last thing you want is to have your incomplete flip listed on the MLS with a description beginning with "Investor Special"

If you can’t be there to check on your flip as often as required you can hire project managers to be your eyes and ears.

@Walter Correia

The thing is with refinancing these day’s, lenders tack on pre payment penalties of 3-5 year terms. So if rates come down and you want to refinance again you’ll have to pay a fee out of that “equity” to do so.

Something to consider.

And don't forget the new loan has to pass the DSCR with a 1.0 or greater or else they will have to lower your loan amount and/or buy down the rate.

Good Luck!

I would list it as early as possible. Give the potential buyers an opportunity to select their finishings

I just closed on a Bridge Loan today on a property in Decatur GA and my rate was 9.25% borrowing around 300k all in.

The lowest rate I’ve gotten is 9% but its based on alot of factors that are independent of mortgage rates.

@Adam Johnson

I almost lost out on a property doing this exact same thing as you did with an escalation clause.

Next time offer your highest bid and call it a day if you really want that property.