All Forum Posts by: Saban Becirovic

Hi Antonio. To answer the question, we'd need more detail. How did you come up with an "After Repair Value" if the home is in excellent condition? What is the current value of the home and how much money do you need to make it worth the ARV? How are you buying it? How much profit are you looking to walk away with?

Long story short, anything can be wholesaled if purchased at the correct price.

Hi Spencer,

It sounds like you're having a hard time finding the right deal and need to switch strategies to force it to work. I would be careful doing that because it can cause a headache down the road. I would recommend buying something that would work great as a short term rental, but you could also use in a different way if things went south... You don't want to buy a deal that only works as a short term rental and doesn't cash flow if utilized in a different manner. The top investors are buying properties that can be used in multiple ways - short-term rentals, medium-term rentals, co-living, house hacking, long-term rentals, etc... If their #1 method fails due to market conditions, they are adjusting to the next best method. I would urge you to think outside of the box and think about other ways that you can make properties cashflow.

Also, it sounds like you may be using some type of traditional financing, which is probably resulting in a high mortgage payment due to high rates. If that's the case, you need to start looking at off-market deals which can be purchased for less money, or start learning about creative financing. You should figure out your numbers. What kind of property are you looking for? Where? How much will it rent for? What kind of cash flow are you looking for? Based on that, you can figure out a mortgage payment/price you are willing and able to pay. Then, start networking with everyone you can in the industry. Let them know what you are looking for and be ready to proceed when somebody brings the deal to you. 

Good luck! 

Jakeira,

When you say "wholesale contract" what exactly are you referring to? Are you looking for the contract that you will use to come to terms with the seller of the house or are you looking for the document that you will use to actually assign the deal to a buyer? 

If you are looking for the contract that you will use to come to terms with the seller, you can use the regular contract used to purchase residential real estate. There is an area on it where you disclose that the contract is assignable. If you need this, I have the latest FAR-BAR As-Is contract that I can share with you.

I'd recommend you reach out to successful wholesalers and pick their brains. If you have nothing of value for them, offer to pay for their time. I'd reach out to wholesalers in different cities than myself, so they don't see me as competition. Get on a zoom call with them and see what they are doing. You'd be surprised how much people would be willing to help you.

Good luck!
Saban

Justin,

I use Propstream so that' s the one I can speak about. It costs me $100 per month. I believe they do have direct access to MLS data, but due to rules and regulations at this point in time they can't share that actual data with it's users. So, they use the data they have access to along with some algorithms to give it's users numbers that are 99% accurate or better. You can read more about it at this link. 

If you want or need actual MLS data, why don't you just reach out to a realtor and have them set you up on a few searches that you are interested in? They can set you up to receive an e-mail every morning with new houses on the market that meet your criteria. I'd be happy to get on a call and do that for you.

Let me know if this helped.

Saban

Kailas,

In Florida, you aren't allowed to pull a permit as a homeowner unless it is your primary residence. Are you sure the owner is allowed to pull a permit on an investment property in your jurisdiction? I would verify that before you make any decisions.

If you can pull the permit and it is significantly cheaper, I would almost lean towards Option A with some type of payment plan. Your permit will require inspections by the city. So, try to workout a deal with the handyman where you can pay them each time the inspector comes out to take a look, if at all possible. This way you can make sure you are paying for work that is being done correctly. Also, do not pay them the full amount until your final inspection has been completed and the permit has been closed. Save at least 10-20% of the project cost for after the permit has been closed. If you pay them in full before it's closed and you have an issue, it will be a pain to get them back out there. This applies to both Option A and B.

Tyler,

This is truly something that depends on your goals. If I understand your post, you would like to live in the house while renting out the remaining bedrooms. If that is the case, I wouldn't focus on producing positive cash flow as much as I would focus on lowering your living expenses. I'm in the Tampa Bay area of Florida, so I can't give you exact numbers that would work for DFW. But take this for example - If you were to purchase or rent a house for yourself you would spend $1,200 a month. If you purchase a 4 bedroom duplex and have a mortgage of $2,300 per month, can you rent out each room for $700 per month? If you can, you will have $2,100 of your $2,300 paid for. Essentially, you are only paying $200 to live there while your roommates are paying $700. Also, you would be paying $1,000 less than if you were renting on your own for $1,200. While you aren't producing any cash flow, you are living there for relatively cheap.

Realistically, there is no formula that can tell you what you should do because house hacking truly depends on your comfort level and what you are willing to endure to lower your living expenses or produce cash flow. It's all about what is worth it for you. Also, think long term. Your roommates will literally be paying this property off for you while it appreciates!! In the future you can move out, rent your bedroom, and then you can focus on producing positive cash flow.

There was a gentlemen on episode 560 on the Podcast a few months ago - Sam Wegert. He is all about purchasing houses and utilizing them as co-living spaces where people rent out rooms and have some type of common area. He doesn't necessarily live in them, but he does have some great ideas for investors who are looking to rent out bedrooms. I would highly recommend you listen to this if you haven't already.

Finally, try not to share with the other people that you are the owner of the property unless you have to!

Good luck!!

Shelia,

I would say your best approach would be to schedule an in-person meeting, if at all possible. Make sure you come prepared - try to have some type of portfolio that you can share with them so they can understand your investment history and why they should lend you money. It's okay if you haven't done many deals, show them any successes you may have had. If you haven't done any deals yet, have something analyzed and on paper that you can share with them so they can look at numbers and explain to them exactly how you will get that done.

If you can not meet in person, your next best option would be a video or phone call. The small town banks and hard/private lenders can get creative if they like somebody and want to do business with them. Hence, try your best to build a relationship and make the lender want to work with you. Once you finish the call, follow up with an e-mail and send them any documentation that would help them make a decision!

Finally, if one lender is not interested, do not give up or get discouraged. There are plenty of lenders out there and they can all make different things happen.

Good luck!

Very well done, the house looks great! Can I ask you how long the rehab took and did you do the work yourself? If you didn't do the work yourself, did you hire a GC or did you act as a GC and hire subcontractors? 

As far as I'm aware, the down payment should be the same when purchasing from 1 to 4 units. If it was 5 or more units, then you would likely need to use commercial financing and that may require 25% down with different terms then a typical mortgage. However, everything still comes down to the lender you are using.

As far as what you should do, that is something only you can decide after analyzing both properties. I would suggest getting a little bit out of your comfort zone. The following quote came directly from Brandon Turner's Instagram and I believe it is spot on for any type of growth.

"I'm such a big believer that you have your comfort zone, your inability zone, and your STRETCH ZONE. Your "Inability zone" is
where you don't have the requisite skills or knowledge in order to progress towards a certain level (for example, I wouldn't tell somebody who's getting into real estate investing with zero knowledge, to go out and buy a 150-unit). Mastery doesn't happen overnight. The magic happens when we reach our "stretch zone"- it's where you take enough action and risk in order to gain experience and knowledge outside of your comfort  zone, but not too outside of it that you're completely lost and don't
know what to do. For example, if your comfort zone is buying single family homes? Maybe your next step is to try a small multifamily like a duplex/triplex/fourplex!" - 

Good luck with your ventures! 

Once all of the previous owners things were removed from the cabinets, we noticed most of the cabinets around the sink were rotted from an old water leak. We decided to re-do the kitchen. The cost to fix it and have the cabinets painted was almost the same that it cost me to just replace everything. Here is what we came up with. What do you guys think? This project is almost complete now and should be going on the market within about a week!