All Forum Posts by: Ryan Johnston

Sketchup is probably the best online software that you can get as a free user. There's a library of furniture, it's simple to use, and it looks decent. As for a cost estimate - I'm not sure of any app that I would trust to do a cost estimate. I usually just do a square foot and quantity takeoff and estimate it myself. The costs vary so much from market to market that it's difficult to provide an estimate like that. Example: my insulation cost per square foot in FL is going to be 10x less than your cost per square foot for insulation in MI. 

Hey BP!

I have a pretty basic question for you but it's curious nonetheless. I have a potential flip lined up but I can't fund it all myself. I was going to resort to hard money, I ran my numbers and it worked out. I've been talking to a lot of people about flipping properties, specifically people at work and family/friends. They have money and they like the concept of investing (especially when I tell them the potential return they can get). I'm offering up 12% because that's what the hard money lenders wanted. Except with private investors I don't have to jump through some company's hoops as well as saving money on origination costs etc.

I was wondering what is needed to pool together private lenders. There's so many things online about this but it'd take a long time to sort through. Is it as simple as having a contract written up by an attorney that says you give me money, i buy the house, make all the flipping decisions, this is the promised return, here's how you'll get it?

I wasn't going to do private money first because I wanted to show a proven model to investors but people keep wanting to invest with me (not a bad problem to have, eh?). It might come down to doing half private money and half hard money. HML to fund the house purchase but private money to fund the rehab.

What are your thoughts?!

Hey Hilary!

I'm new to investing too but I think I could offer some help to you. I'm currently offering on properties, working negotiations and trying to get my first flip here in Tampa. While nothing has came to fruition yet, I'm hopeful that it's coming soon. Consistent action, right?

Anyways here's my answers to your questions:

1. Hard money lenders are all over the place and some are even tied to wholesalers. The HML that are tied to wholesalers are usually helpful if you can find a deal through them. They offer special perks and better terms usually. I did a lot of researching for HML and I have about 3-4 on my list that I think would work for any project. Their terms are different but I run the numbers using the best one. They're all pretty close though. My tip here is call a ton of them and get rates from all over the place. I built a mini speadsheet of 20 HML and I called them all. I put the rates in the speadsheet and compared. It helped me narrow it down from 20 to 3-4. I also got a proof of funds from one HML so I can attach it to my offers. 

2. Finding deals are the part I'm struggling with - mostly because I'm offering way below their asking price. Better to make my numbers work. Set your price and don't let emotion make you bid higher. Find wholesalers, setup strict MLS searches, and network

3. I just got my real estate license about 2 weeks ago so I could negotiate and offer on whatever I want to. Plus I can look at houses whenever I want and save a couple thousand on commission. Might be better to activate it if that means you'll take more action. At least that was my reasoning..

4. I thought about the GC license too but I thought I wouldn't get it because then I'd fall into the trap of 'doing-it-all'. After years of studying entrepreneurship, i hear this is a common trap you don't want to fall into. I work for a large GC right now and I feel like I have the experience to manage some sub-contractors myself.

5. read that book asap! I loved it. I devoured the information in that book and reread it. I recommend getting the hard-copy though. It's easier to reference later. Other advice: consistent action. 

I'm still working on my first one, but this is what i've learned so far. I hope it helps!

I do think the comps support 175k. There's 6 sold properties that are either new or extensively rehabbed selling at 168k+. As another plus, there's currently 2 properties that are pending at 199k that were rehabbed but built in 1925. From what I'm seeing the houses that I'd consider as mid-grade rentals are running at 75k and the nice houses that are flips or new construction are running at 168k+

at 160k this house is a grand slam... But I'd be happy with this house selling at 145k

Hey BP,

Kind of in a predicament here. I'm running comps on this property and I'm seeing stuff all over the place in terms of price. I'm trying to get an ARV for this property but I'm getting stuck on what it could be worth once its fixed up and I usually never have a problem with this. House is a 3 bed / 1 bath at about 1000sf and it's on a 7,200sf lot. I plan on having the house have an open floor plan, granite, updated flooring, new windows, adding some curb appeal - the works.

There's properties in the neighborhood selling from 30k (absolute dumps) to upwards of 175k (same level of rehab but 100+ days on market). And then there's middle grade properties going for around 130k (good rehabs going for list price in about 1-2 months on market). 

I don't want to be too optimistic and assume I'm going to get it for 175k but at 130k the deal doesn't work. 

Can someone help me out with a comp?

(a lot of the houses that are around 60-75k aren't in good shape. Think of those as mid-grade rentals)

Hey Jorge,

I just moved to Tampa from Chicago for the main reason being the amount of investment going into making this city great. I'm heavily involved in large construction projects and I was seeing a lot of interest in the region for large scale development projects. One of things that poises Tampa to be a prime investment is that most of the infrastructure for a mega-city is already here. It has the large airport, the fancy shopping malls, unique neighborhoods, and the large highways. It's now receiving some media attention. I think that 10 years from now Tampa will be a tech hub much like Austin TX is becoming right now. 

Some of the sources I look at are the TB Business Journal, Curbed Magazine, & TB Times. Excited to see the future of this city I now call home!

@Shawn Ward Thank you Shawn. This was the answer I was looking for. I'm working on getting the POF as we speak. I think this will really help the appearance of my offer when it comes to short sales, foreclosures and retail purchases. I appreciate the help.

@Stephanie P. I don't have the cash full out to buy and flip the house. Hence the Hard Money Lender. The hard money lender would be the one providing me with a 'proof of funds' or the pre-qualification. I'm asking which one is considered stronger.

Even if the money is coming from a hard money lender it's still considered a cash offer from my understanding because it's not contingent on any traditional bank financing. The offer wouldn't be written up as a financed purchase. Just a cash offer with a note that says it's coming from a HML and attached is the proof of funds/pre-qualification.

I'm looking to get my funding for future house flips and I'm planning on going through a hard money lender for my first deal. I'm starting to inquire about some of these loans and I'm curious as to what's more powerful when placing offers on houses that are on the MLS.

Is it better to have proof of funds or is it better to have a pre-qualification from a HML? I plan on writing the offers stating the finance is coming from a cash offer in order to close faster. This should give me a little bit of an edge in an otherwise competitive market.

Thank you for your help in advance!

To classify as a bedroom you'd just need two areas of easement and a closet*. It looks to me that all your rooms have a window and a door on opposite or adjacent walls. Adding a sliding glass door doesn't change a bedroom into something else. It's still, by definition, a bedroom. The closet has an asterisk next to it because this rule is flexible and subjective in most states. The rest of the requirements are typical fire code rules. 

(architecture school coming in handy after-all...)