All Forum Posts by: Rodney T.

So Im looking at a distressed property that I think would be a great fix and flip. It's an extensive remodel I think would take 4-6 months depending on how much outside work was contracted vs done in house (myself). It's a cash only deal which I think I could get for somewhere between 250K-275K. I think the rehab budget is up in the air right now but the GC I had stop by today said 120K. The comps I looked at say a ARV of around 507k isn't unreasonable. It has a recent roof replacement, septic inspected and good, HVAC looks new and kept up, and though the foundation hasn't been looked at by anyone professionally it doesn't appear to be cracked etc. The house has serous basement level water damage which is the major part of the rehab and the master bedroom was framed but not finished. So plenty to do but I think even with a serious rehab job this place could clear 100k on a flip.

If the private money I raise isn't enough, how would you suggest I make money on this deal? I can't finance it, and as far as I know I can't put it under contract and wholesale it, but I don't know much about wholesaling. Thoughts? 

Just to add something basic. It seems a recurring theme that networking is key to finding deals outside the MLS among those listed by @Ronald Allen Barney I've heard RE bloggers, those with website bios, those participating in forums such as this, and in person discussions as being ways in which people get to know you and begin to develop a sense of who you are, so later they may think of you when something comes across their desk. I think we want to hook people up with good deals and not see good deals go to waste and we like to build social credit by helping others out. These reasons make me think that you need to be at the forefront of someone's mind by doing direct mailing, contacting agents, lenders contractors, (whomever) frequently and reminding people of your specific buying criteria and other such strategies as a method for landing deals with less competition. Obviously distressed properties, people, and markets help too. 

I like the way you think. It's a little deeper and apparently needed based on the math being done that initally failed to take into account taxes and insurance (and their ability to change), and Cap Ex which, as mentioned, may just be that roof you decided not to replace etc. I like your way of looking at the property as something that isn't static. You mentioned "locking in your gains" as a way of describing their potential fragility; that's a helpful way to think about them. The posting investor mentioned the part of town for the second property as undesirable and your comments on appreciation speculation based on the reality of the area is important to consider. 

I'm no expert but perhaps you should clarify your position a bit more. I don't think a population size correlates to quality tenants, unless by quality you mean high paying? What unfavorable odds are you referring to? Is this a question about possible vacancy rates? I think if you explore those questions someone more experienced then myself might be able to help you with your thought process. 

Thank you for that advice. I did speak with the agents partner today who told me she would look for some more comps for me. I'm not sure what information from the comps is critical and what's superficial. I have a split level house I'm looking at but most of the comps were single story. However they were sold recently and within a few miles and they were built within 10 years of each others and have comparable square footage. I like the idea of searching recently sold properties with similar criteria myself and going to open houses. I feel like finding good comps is a both a way to see if I might be interested in, or have a deal by doing a rough ARV calculation using price per sq/ft, but also my rehab costs are centered around a solid ARV and I don't want to be mislead by comparing apples to oranges.

I got about 5 comps from an agent today. I understand that I’m the county it maybe hard to find good comparable data; and most of them seemed ok from a novice perspective but one of them was absurd. It made me concerned about the agents due diligence on the others. Without getting into it too deep or hiring an appraiser how do you vet good comps?

It's like you're reading my novice mind Jared...So we just had lunch. We're old friends so it was good to catch up, but I came to the realization myself that my criteria were not yet specific enough. I was pleased that she referred me to another old friend of ours whose a rockstar lender with a great track record, as well as, a successful investor in his own right. She gave me his contact information. I was also please to find out that she's a bit of a rockstar herself. She stages homes with her husband and has a container full of furniture at her house, she just sold a place for 145K over asking price for a relative her Broker Manager; which to me shows how much trust he has in her (the brokerage has 140 agents). She just did a cash out refinance on her own home for 150K and told me about the process and shopping around for lenders which was helpful. She said the process for them was about 45-60 days. And as you might have guessed she's crazy busy right now and has taken about 6 days off in the last 6 months because she is hustling. With material prices at an all time high her remodel project went over budget so she's trying to make up the difference in sales. She's been in the business 5 years. 

I am looking to the BRRRR strategy, but not sure I can get that much cash together initially. I want to go the private money route, but although I have people willing to lend I don't want to burn any bridges right out of the gate with my first deal and no track record; incase things don't go according to plan. I have a high debt to income ratio, so a partnership would be right up my alley. I work for someone that's expressed interest in partnering with me so I think that's the direction I'll take for my first project.
 

Dawn Anastasi is an investor I heard about on the bp podcast #29 lives in Milwaukee and buys SFH and duplexes. She also partnered with a guy on bp to do some deals. Seems like a great local resource. You should reach out

I've got an old friend I'm reconnecting with today who is a local real estate agent. I wanted to pick her brain a bit a do some networking. I was looking for some suggestions on what to talk to her about. I was going to ask her if she's done any deals with investors, knows of local investor groups, and if she can keep an eye out for distressed properties for me. I recognize I need to develop some investment criteria which I'm working on. Thoughts on making a meaningful discussion? 

@Brad Hammond ok, I know I’m asking a strange question and perhaps the best course is just a referral and some good will. I’ll talk to my realtor friend. Thank you