All Forum Posts by: Drago Stanimirovic

Hi Desiree, welcome to real estate investing! 

For your first long-term rental, it’s often better to start in an area you’re familiar with. Being nearby allows you to monitor the property, understand the local market, and handle issues more easily. However, if your local market has low returns (high prices, low rent yields), expanding to an out-of-state market with better cash flow might make sense. If you go that route, focus on stable, landlord-friendly areas with strong rental demand, and build a reliable team on the ground (property manager, agent, contractor).

Regarding property management, it depends on your bandwidth and goals. Managing the property yourself can save money, teach you the ropes, and give you firsthand experience dealing with tenants and operations. But if your time is limited or you’re managing from out of state, a property manager is worth it. They’ll handle tenant screening, maintenance, and rent collection, ensuring things run smoothly while you focus on growing your portfolio.

Ultimately, starting local and self-managing is a common path for new investors, but outsourcing property management or investing remotely can work well with the right systems in place. 

Best, 

Drago

Hi Malcolm, 

With your strategy of holding multi-family properties or flipping, the key is running the numbers carefully to match your goals. For rentals, focus on cash flow and metrics like cap rate (target 8%-10%) or cash-on-cash return. For flips, ensure the profit margin after all costs is at least 20%-25%. Analyze properties by looking at gross rental income, operating expenses, and the debt service coverage ratio (DSCR above 1.25 for rentals). For flips, calculate the after-repair value (ARV) and subtract purchase, rehab, holding, and selling costs.

Pay attention to location, rental demand, and the property's condition. Strong rental markets with low vacancy rates are ideal for long-term holds, while areas with high ARV growth are great for flips. Once your pre-approval is finalized, evaluate each property by inspecting it, confirming the rehab scope, and making offers based on realistic numbers.

Drago

Hi Eli, 

This is a creative and potentially win-win strategy that could work well in the right situation. Bringing the seller in on the deal not only gives them an opportunity to benefit from the upside of the flip but also positions you as a problem-solver, which can build trust and goodwill. Sellers who are in financial distress or dealing with a property in poor condition might be more open to this type of arrangement if it helps them get back on their feet.

The key to making this work is transparency and clear communication. Structuring the agreement properly, outlining how profits will be split, who covers the rehab costs, and what the timeline looks like can ensure the seller feels confident in the process. This type of deal can also help you minimize upfront costs, as you’re reducing the cash needed to buy the property outright by aligning the seller’s financial outcome with yours.

While there may be details to work through, such as crafting a solid contract or ensuring alignment with any financing you bring in, these can be easily addressed with the right team in place. The big opportunity here is creating a scenario where both parties come out ahead, especially in situations where the seller might otherwise walk away with little or no proceeds.

If you’re considering moving forward with this kind of structure, I’d be happy to assist with running the numbers or exploring funding options to make it happen. Let me know how I can help.

Drago

Hi Joshua,

It’s great to hear you’re starting your real estate investment journey. For fix-and-flips, you should focus on Atlanta neighborhoods with strong demand and a good spread between distressed properties and ARVs. Start small, ensure your numbers (purchase + rehab + holding + selling costs) leave room for profit, and build a reliable team (contractor, agent, lender).

For financing, work with lenders who specialize in fix-and-flips. Flexible options are tailored to help first-time investors like you get started. Once you've built capital, transition to small multifamily units using DSCR loans for steady cash flow.

If you need help analyzing deals or securing funding, let me know. Wishing you success!

Drago

Hi Logan, 

Your scope of work is detailed, but the budget looks underestimated for a high-end flip of this size in Nashville. Here are key adjustments:

• Kitchen ($50k): Likely $60k-$70k for custom cabinetry, quartz, and premium appliances.
• Bathrooms ($40k): Expect closer to $50k-$60k for four bathrooms with high-end finishes.
• Flooring ($20k): Likely $25k-$30k for engineered hardwood, refinishing, and tile.
• Exterior ($12k): More realistically $15k-$18k with landscaping and a quality front door.
• Misc. Repairs ($5k): Increase to $10k for unexpected issues in a 4,000+ sq. ft. property.

Total reno costs will likely fall between $180k-$210k, not $145k. With an $800k ARV and $500k purchase price, your gross margin ($300k) shrinks significantly after adjusted reno costs, holding costs, commissions (~$90k+), and closing costs. Net profit could dip to $20k-$40k, which is tight for this scale of project.

Consider adjusting your reno budget or negotiating the purchase price. If you need tailored funding, we can help optimize your financing. Let me know how I can assist further!

Best,

Drago

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Hi Max,

Welcome to Phoenix! House hacking is a great starting strategy, especially with FHA loans. If multifamily options seem scarce, consider house hacking single-family homes with extra rooms or an ADU for cash flow. To connect, join local REI meetups, BiggerPockets threads, or Phoenix investor groups. An investor-friendly agent is also key.

If you’re looking for creative financing options, feel free to reach out, I’m here to help!

Drago

Hi Joe,

Using a Home Equity Line of Credit (HELOC) on your primary residence can be a practical and low-cost way to fund flips, especially since the terms you mentioned include only a $200 yearly fee. However, keep in mind that tying your primary home to an investment carries inherent risks, especially if the flip doesn't go as planned. It could impact your home equity and financial security.

For a safer and more specialized alternative, consider a Fix & Flip loan. Let me know if you'd like more details or assistance!

Best,Drago

Hi Edward, To connect with more advanced investors in Spokane, start by exploring local real estate meetups through platforms like Meetup.com, Facebook groups, or BiggerPockets forums. Look into Spokane's REIA chapter for networking opportunities and consider attending real estate conferences in the region. Build relationships with local agents, property managers, and contractors who specialize in investment properties. If you can't find existing meetups, create your own by organizing casual gatherings for like-minded investors. Documenting your journey online or engaging on LinkedIn can also help expand your network. Let me know if you need any help with funding your next deals. Best, Drago