All Forum Posts by: Christopher B.

Hey Tae, I am thinking about switching banks, do you mind to share the credit union you are using? Is your lender familiar with investors? 

I don't know if anyone from bp uses them, probably do. So I shouldn't worry about getting copy of business license or any kind of documentation from them that verifies their entity and that type thing? 

I guess you could say I am hesitant when first working with new companies, especially if they're not local. 

Not sure of the best place to post this so here it goes.

I've talked with an online bookkeeper that I like quite well. They handle other investors, seem to get it, etc. We've discussed how they'll access accounts with view only logins, etc so I feel pretty good about trusting them but I've never hired anyone that wasn't local. Is there anything I should do or get from them to verify them as a company before moving forward?

@Matthew Paul I understand your position, some people like working with homeowners and in this environment it makes a lot of sense. I don't know if I can agree that it's riskier to work with investors. I agree with you that if they have no experience with rehabs or are dependent upon draws from the bank it's riskier and not worth the effort with as much work is out there. For my subs, they know exactly what they're getting and that's paid. 

K&T was installed around the time of the Ford Model T. There has been at least 3 generations of wiring updates since then. They're outdated and dangerous. 

If my business is to sell the house then I have to pay you or your lien will prevent me from accomplishing my end goal. You have recourse via that lien which prevents me from selling the house and getting paid. What is my recourse when you walk with $3k of my cash? Nothing.

I respect your opinion and know it's done that way on the retail side of the construction business. Heck, if I was doing a customer job I'd probably charge the same because there is more risk working with a homeowner. However, when a contractor works for an investor/builder it's a business to business transaction and should be treated as such. You're right though, building that trust is difficult in the beginning. I think we've all been burned a time or two, it's unfortunately part of this business. 

"When we ask" I bet you do love getting paid anytime you ask for payment. Unfortunately most people will do this. 

Good income. Continue to contribute to 401k to get the max contributions from your employer. Get rid of the truck payment, by something cheaper with cash or significantly lower the payment. Just pay the student loans monthly as you're doing. Instead of buying a single family residence buy a multi family to live in, this will help in real dollars as well as make you a stronger borrower for the bank.

Don't wait until you have cash to buy a property. Do more research on here because honestly that doesn't make much sense. You'll be waiting around for years before you even get that first property. You have to use leverage, at least initially. Buy some properties with loans. Don't touch the cash flow except for expenses or to buy more properties. Once you get a couple and you have enough cash reserves you can start implementing the snowball strategy and pay them off sooner if you want but use leverage to acquire them first. 

Everyone has an opinion and here is mine. Max out your 30yr conventional mortgage bullets. These should cash flow well so will be less risky. After this you will get portfolio loans of the 5yr amortized over 20yrs variety, use the cash from your 30yr note properties to snowball against these shorter term loans. 

Read up some more on finance and stuff to wrap your mind around those concepts. Should help ease your worries about leverage 

 Agree, apps are the way to go. I used the Xero app to enter all my receipts soon as I paid for them. After a while I wanted to track my project costs more closely. So once a week or so I'd sit down and use my app to enter my receipts into my books then manually enter it into my project spreadsheet. Wildly inefficient, this took me hours but it gave me the level of detail I wanted. Working on a better way to do this now. 

Corey, 

1. So you delay the closing for 8 weeks which means you start rehab in the fall and selling in the winter. Winter sales are always slower and generally sell for less. Not good for you or the investor. Does the seller want to wait 8 weeks? Most are looking to sell today. You're risking losing the entire deal here if they balk and go to another buyer. Quick actions is paramount in this business.

2. If it's a homerun the investor will know that upfront, you don't just blindly walk into those generally. 

You want to make as much as possible I understand but think of timelines as well as your time. Remember a bird in the hand is worth more than 2 in the bush. In your position the opportunity to learn is more valuable than the bigger pay day and you may lose the smaller payday and opportunity to learn by chasing the bigger dollars. You can use the newfound knowledge to lock it down for yourself with confidence on the next one. Find a trust worthy investor and let him haul this fish into the boat but structure it that he's teaching you how he does it, step by step from start to finish. Just make that part of the deal. If you want to be part of the project then instead of taking a finders/wholesale fee offer to bring them the lead and assist in the project for 5% of the gross profit. Be wiling to go to the lumber store, do returns, open doors for contractors, be on site for inspections, deliveries, etc. It's not about what you are doing but what you're exposed to. Even if you have done a couple, seeing how others do things can always help.