All Forum Posts by: Ryan Lockstein

So I'm going to answer your question based on my experience.  I'm sure there are better ways but here is how I did it.

On my first rehab deals I used HARD MONEY.  I know it is not quite as cool and attractive as PRIVATE MONEY but easier to find and get for your first/second deal.  The underwriting for hard money is kind of a pain and the terms vary a lot but you do what you have to do to make it work.  Once you have done a couple deals and have a proven track record getting PRIVATE MONEY with better terms becomes much easier.   

At this point you will be confident enough to lock up a contract on a property before you have the money lined up (since you can always go back to hard money or wholesale it worst case).  Once you have a contracted deal you can ask other experienced investors who they are using (you will be surprised how many of them lend private money themselves) and pitch them your deals and experience.  Once you find one, rinse and repeat.  

Crazy debate over the 70% rule in this thread. I use it all the time in practice and get most of my deals around that figure. It's not a hard rule for me but a great starting place for a newby. If you can get a deal for 70% of ARV you almost always have a deal, seems silly to me not to teach it as a good starting guideline.

As for your question on repair cost estimates this is how I do it.......  Speak to a few very active local rehabbers  and ask them what they are paying per sqft on average to do a full gut rehab and also a cosmetic rehab on the type of property you are looking to contract.  Once you have that figured out you can easily calculate a rough construction budget using the square footage and condition of the property you are trying to value.   Hope that helped.  

I agree with everyone else's comments. ARV analysis comes easy very quickly once you have done a few deals. Basically you are looking for properties that are as similar to your property as possible and in the condition you want yours to be in when the rehab is done. Things to look for as stated above Square feet, bedrooms, type of property (row home vs detached single). It's a pretty easy skill set to practice. My biggest piece of advise is to heir on the conservative side if possible. In other words don't just pick the very highest similar comp and use that one.

There are 2 big reason people typically use hard/private money or cash for the initial purchase of a house they plan to refi and pull all or most of their money out of.  

1.) A lot of properties (not all but most) you buy at a steep enough discount to be able to make the numbers work to pull out all of your cash on the refi require a lot of rehab. Conventional / FHA loans have a minimum standard for the condition of the property they will lend on (ie must be livable, have working stove and heat). So in a lot of instances the good deals won't qualify.

2.) You will most likely need money to finance your construction/rehab. Conventional/ FHA loans (not accounting for FHA 203k) do not lend you money for construction. So in addition to using one of these types of loans, you will then need to go find money for the repairs. On the other hand, hard money lenders will include your construction money in their loan, typically in draws.

In my experience finding off market discounted properties (I have done hundreds of deals) direct mail has been my best marketing strategy.  Like you said though, it takes some time and a lot of setting up of systems to make that strategy work efficiently though.  My other biggest off market deal finding strategy has just been buying from wholesalers.  Get on their email lists and check them religiously.  You will find 50 ****** deals for every 1 good one from a wholesaler list but if you are consistent with analyzing them as they come in, you will consistently find deals (for free!).  

I hope that helps.  

I have done a few successful wholetail deals recently. I think one of the previous replies was right though in the fact that this may not be a deal. I also apply the 70% rule. The way I structure them is to close, clean, and list. You would be surprised the value increase in a property that is clean and painted vs a dirty mess (I usually spend under $5k). That being said, I think your number is $126k or less depending on repairs for this one. You have to factor in closing costs front and back and costs of getting the place ready for a retail buyer. Finally, I prefer selling to owner occupants. They will always pay more than investors.

The concept of wholesaling is really easy.  I have done it full time for the past 2.5 years.  I've never read a book on the subject but BP and there is a great Facebook group called Wholesaling Houses Full Time - Alex Joungblood.   These two places have way more than enough information to get started.    

I have been using private money but just maxed it out on my last deal I closed.  Just got a great deal and need it funded.  What i learned so far is that if you are going to use hard money you should get approved and learn their terms before hand because good deals usually don't have long contract time (this one is 3 weeks).   On the flip side,  if it is a great deal you should be able to wholesale if you can't get it funded so either way you make money.  Long story short, get pre approved if you can but if you find a great deal before you do lock it up.

Hi Ofer, I am an investor and Wholesaler in Philly.  Been full time for about 2.5 years now.  We are doing both wholesaling and wholetailing as our primary strategies for income.  If you are thinking about investing in Philly and need some boots we should talk.  I actually work with outside investors (Guys from North Jersey) already where I act as boots for a profit split.  If you want to talk private message me and I'll shoot you my number.  

I am purchasing a property that has a foreclosure auction date of May 5th. Today is April 21st. Who do I need to contact to stop/ postpone the auction? Do I need an attorney to expedite this?

So I am looking for a good software/website that I can use to make professional looking flyers to advertise an open house.  Is anyone using one that they like right now?  Free is great but paid is fine if it is worth it.