All Forum Posts by: Spencer Cornelia

@John Sonmez fellow programmer here.  Loved your course(s) on Pluralsight.

Have you considered just buying a medium multi family in the midwest or in a city with known high cash on cash return?  The downside to these large multi's is low to no appreciation.  But you could buy a 10-24 unit with cash using the $550k.

It sounds like finding a solid property management company is more important to you than finding a great deal.  Any of these solid cash flow markets will yield a 6-8% cash on cash return which would provide $35k-$40k cash at the bare minimum.

Another thought may be to purchase a couple 2-4 units in a market like Columbus, OH.  There are a lot of good options in good areas with solid tenants that will generate solid cash flow with low maintenance.

@Dennis Johnson there are some great responses in this thread, but be mindful that those with more experience massively overestimate the abilities of a beginner.  I only have 7 units right now but I'm massively ahead of where I was 12 months ago.  I can sit here and give you advice, but it may not resonate until you're ready.

What every beginner should do before "finding capital", "wholesaling", etc. is to read as much as you can, listen to every real estate podcast Bigger Pockets has posted, and network with everyone you can.  Even go into Atlanta to meet up with people.  You need knowledge in this game before you should even consider raising capital.  Do you really think people are going to invest in you if you don't know what makes a deal 'good' or 'bad'?

Spend the next 12 months networking and educating yourself and you may have a chance in this game.

My first two flips has been the contractor providing a general estimate for each area of the rehab.  Based on your post, it looks like you're providing a great estimate.  I can't imagine someone with experience needing any more than what you're providing since costs can vary GREATLY based on the materials and the rehab.

As a thought experiment, maybe you could add your thoughts on what you think should be done to the property.  For instance, in my 2nd flip, I've allowed the contractor to come up with what he thinks is best for the property and I trusted his 24 years of experience.  Maybe you could provide a couple scenarios that you think would benefit the property -- such as, adding a master suite, removing an unnecessary wall to open up a living room, adding a 1/2 bath to the first floor, etc.

I'd imagine for those of us who are relatively new (like me), it's easy for us to just look at numbers and not understand that flipping is as much of an art as it is accounting.

Pay property management.  I have a w2 so I have no interest in managing (nor do I have the bandwidth).  My minimum is $0 per month.  My 4plex is a break even property but I bought using seller financing with only $20k (~8%) down and with built in equity.  I'm not reliant on real estate to pay my bills so I can afford a break even buy and hold if it makes sense.

If I were to buy a property in the midwest that was a straight buy and hold, which I may be looking for in q3 2019, I'd want to see at least a 8% cash on cash return if no appreciation were reasonably expected.

In my experience, for my two flips, they have asked who will be doing the work and my relationship to them.  It wasn't much more than asking me, but I'd imagine most/all hard money lenders will want to figure out who is doing the work and if they're experienced.

@Jay Hinrichs @Phillip Dwyer @Olivia Hardy

Hey Vegas locals.  @Alexander Felice who was on the podcast a few weeks ago and myself have been meeting up every month to casually talk real estate.  It's grown to 20+ locals.  Super casual.  We usually start with real estate but then segue into the books we're reading, future of real estate, crypto and blockchain's future affect on real estate, and everything else under the sun.

Most of us are good friends and all have different interests in this game so we all have different viewpoints on any questions the group has.  Any one is welcome to join.  We always get together first Sunday of the month. 8am at Einstein's on Decatur and Sahara, but we may be moving somewhere else soon due to the amount of people attending.

@Chris Lynch One recommendation for thought: attend all of your local meetups of every category related to real estate.  If your experience is at all close to mine, you will start getting in touch with people doing deals in your area.  Additionally, you will connect with wholesalers who are connected with the buyers.  Over time, you will come in contact with experienced investors in your area, and you will have the option to offer them the opportunity to mentor you.  One option is money of course.  Another is equity in any deals they help you with.  Maybe 50% equity for them to walk you through your first deal as an example.

@Eric Gamble where did the $85k cash needed come from? Could you not find a lender offering more lucrative terms? In my experience, I've seen lenders that will ask for around 10-20% of purchase price and will loan out 100% of the rehab? Especially if the numbers are as good as yours. IMO, I would do this deal if I could find good HML terms. But everyone's strategy is different so whether you do this deal or not is more dependent on your strategy, interests, balance sheet, etc. than anything else.

@Stephanie Hardy and @Nick Arthor - I just used Sagar Raich for closing an off-market property.  He was always available and helpful.  I would recommend reaching out to him to see if he's a good fit.  His office is at Eastern and Sunset.