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All Forum Posts by: Steven Barr

Steven Barr has started 85 posts and replied 158 times.

Post: Insurance on New Construction

Steven BarrPosted
  • Atlanta, GA
  • Posts 159
  • Votes 56

I just learned that builders risk and liability insurance coverage can cease once a CO is issued for a new build. The provider I am using allows for 60 days of continued coverage once construction. 

I’d like to be protected if it takes longer than 60 days to sell a spec. What are y’all doing for insurance coverage solutions?

Post: Construction loan for primary home

Steven BarrPosted
  • Atlanta, GA
  • Posts 159
  • Votes 56

I am looking to get some type of construction to perm loan to build a primary house for myself 

However, I’d like to get a loan that allows as little % down as possible and allows me to be the builder. I am not a licensed GC but I have experience building spec homes that I could show a bank 

Fine paying a higher interest rate on the construction period of the loan, but would like to be more in line with traditional mortgages rates on the perm portion (although fine paying slightly higher if I avoid closing costs for a second loan)

Do y’all have any recommendations on specific types of loans for this or specific banks I should talk to?

Thanks!

Post: Can’t find profitable fix and flip

Steven BarrPosted
  • Atlanta, GA
  • Posts 159
  • Votes 56
Quote from @Kevin Marshburn:

I respectfully disagree with Paul above. Of course, slap and list plays, where it's a few cosmetics updates and re-listing properties mostly as-is was the strategy for some, and in those cases they are priced out of the market now for reasons he stated. BUT, for flippers who take inventory that cannot be sold as-is, requiring large updates and investments to become livable and desirable, that is massive value. It creates inventory on the market that wasn't there before and increases surrounding home values in the process. 

The process and numbers can still work, it's just harder to find deals... 

@Kevin Marshburn I disagree as well which is why I didn't respond. You either go luxury reno for top ARV or basic reno for lower ARV. But the reality is that the rehab itself is the least important part of the flip. It's all about what price you buy, and every flipper knows this

Post: How many hard money loans can I take out at once?

Steven BarrPosted
  • Atlanta, GA
  • Posts 159
  • Votes 56
Quote from @Celia Lumbroso:

Hi @Steven Barr

David Friedman provided valuable insight on this. 

There really is no cap on how many you can take out at once.  I will say if you are actively trying to take multiple loans out at once, the lender will limit their exposure to you to 1-2 deals at most until those loans have been paid back.  Meaning you cannot takeout 10 loans with the same lender. 

Having (10) loans with (10) different lenders is possible but is not sustainable in the long run. 

It's best to utilize one lender and revisit them as you will get better terms/pricing on each new deal. 

@Celia Lumbroso this post is old and got resurfaced, but I ended up getting with a lender that lets me take out 10 at once, or at least as many as I can handle. I scaled quickly though.

Curious what makes you say 10 loans with 10 different lenders isn’t sustainable long term? Other than it just being administratively inefficient 

Post: Can’t find profitable fix and flip

Steven BarrPosted
  • Atlanta, GA
  • Posts 159
  • Votes 56
Quote from @Ronnie C.:
Quote from @Steven Barr:
Quote from @Ronnie C.:
Quote from @Steven Barr:
Quote from @Ronnie C.:
Quote from @Shayne Mitsuuchi:

What are you looking to make on a fix and flip? How many properties are you typically underwriting on a given day?

If you can't make a minimum of $45 grand on a deal, it's not worth it!!! I can/could easily make that off a new spec house and more. Unless you are turning in volume 10-15 or more houses a year.  I could turn 15 plus rehabs a year! But i've been struggling for almost a year to get 1 deal! $10-$20 grand on a deal is pathetic and not worth my time! Heck, you gotta pay taxes on it too, and you also run the risk of the unforeseen and problems along the way with a rehab.

Lets see, I paid my fees and got back on MLS last May, and signed up for Privy. Did nothing for 3 months straight but sit at this computer looking at potential on market deals and crunching numbers!

Now I just call or text agents and say hey, I'm a flipper, before I spend time and travel to go look at this listing, how flexible are your sellers? It's not worth the 1/2 hour to hour trip (one way) to go look at a potential deal, then crunching numbers, then spend another hour on all the paperwork required to submit an offer in writing on a MLS deal.

I also used Jerry Nortons "Flipster" last year for the free trial period! What a joke! If you are wanting to take the time and expense to mail people, I'd spend DAYS scrubbing list of people to mail to. If they haven't owned the house for 15-20 years (with a mortgage) then they aren't gonna have enough equity for you to buy it as a flipper. So i couldn't depend on Flipster, and the comps for on market properties or even an off market address I ran through Flipster was WAY-OFF. Nothing beats MLS and training from a broker who'd been in the business 20 years, and partial training from an appraiser, and this was 22 years ago. I had to school a so called wholesaler last week on his comps, lol!

I also tried Property Radar for a trial period in this time as well. Nope.

I stopped doing mailers, cold calls, etc back in 2007 and relied on MLS. I always got my deals and best deals from MLS or wholesalers who used the proven formula of 70% of ARV MINUS REPAIRS MINUS WHOLESALE FEE.

I found out the hard-way my 1st year that 10s of thousands of dollars or all the time out of my life trying to save money and do it myself was not worth it to maybe get 1 deal trying to buy direct from owners.

Best of luck to ya :)

 @Ronnie C. why were you unable to turn 15 specs in a year? Or am I misunderstanding?

You misunderstood :). I AM able to turn more than 15 rehabs a year, "IF" I could find the deals! I haven't been able to find a deal. 

@Ronnie C. not rehabs, specs. Are you unable to find spec deals as well?


 Building lots are getting harder and harder to find! However, I know where I can still get them. The reason I stopped building new spec houses is because the market and the high interest rates. New construction in my area is sitting on the market 200-300 days going no where! 

But they will buy an older, cheaper,  rehabbed house in a heart beat. 

@Ronnie C.what price range are you finding the new constructions are sitting on market that long?

Post: Can’t find profitable fix and flip

Steven BarrPosted
  • Atlanta, GA
  • Posts 159
  • Votes 56
Quote from @Ronnie C.:
Quote from @Steven Barr:
Quote from @Ronnie C.:
Quote from @Shayne Mitsuuchi:

What are you looking to make on a fix and flip? How many properties are you typically underwriting on a given day?

If you can't make a minimum of $45 grand on a deal, it's not worth it!!! I can/could easily make that off a new spec house and more. Unless you are turning in volume 10-15 or more houses a year.  I could turn 15 plus rehabs a year! But i've been struggling for almost a year to get 1 deal! $10-$20 grand on a deal is pathetic and not worth my time! Heck, you gotta pay taxes on it too, and you also run the risk of the unforeseen and problems along the way with a rehab.

Lets see, I paid my fees and got back on MLS last May, and signed up for Privy. Did nothing for 3 months straight but sit at this computer looking at potential on market deals and crunching numbers!

Now I just call or text agents and say hey, I'm a flipper, before I spend time and travel to go look at this listing, how flexible are your sellers? It's not worth the 1/2 hour to hour trip (one way) to go look at a potential deal, then crunching numbers, then spend another hour on all the paperwork required to submit an offer in writing on a MLS deal.

I also used Jerry Nortons "Flipster" last year for the free trial period! What a joke! If you are wanting to take the time and expense to mail people, I'd spend DAYS scrubbing list of people to mail to. If they haven't owned the house for 15-20 years (with a mortgage) then they aren't gonna have enough equity for you to buy it as a flipper. So i couldn't depend on Flipster, and the comps for on market properties or even an off market address I ran through Flipster was WAY-OFF. Nothing beats MLS and training from a broker who'd been in the business 20 years, and partial training from an appraiser, and this was 22 years ago. I had to school a so called wholesaler last week on his comps, lol!

I also tried Property Radar for a trial period in this time as well. Nope.

I stopped doing mailers, cold calls, etc back in 2007 and relied on MLS. I always got my deals and best deals from MLS or wholesalers who used the proven formula of 70% of ARV MINUS REPAIRS MINUS WHOLESALE FEE.

I found out the hard-way my 1st year that 10s of thousands of dollars or all the time out of my life trying to save money and do it myself was not worth it to maybe get 1 deal trying to buy direct from owners.

Best of luck to ya :)

 @Ronnie C. why were you unable to turn 15 specs in a year? Or am I misunderstanding?

You misunderstood :). I AM able to turn more than 15 rehabs a year, "IF" I could find the deals! I haven't been able to find a deal. 

@Ronnie C. not rehabs, specs. Are you unable to find spec deals as well?

Post: Can’t find profitable fix and flip

Steven BarrPosted
  • Atlanta, GA
  • Posts 159
  • Votes 56
Quote from @Ronnie C.:
Quote from @Shayne Mitsuuchi:

What are you looking to make on a fix and flip? How many properties are you typically underwriting on a given day?

If you can't make a minimum of $45 grand on a deal, it's not worth it!!! I can/could easily make that off a new spec house and more. Unless you are turning in volume 10-15 or more houses a year.  I could turn 15 plus rehabs a year! But i've been struggling for almost a year to get 1 deal! $10-$20 grand on a deal is pathetic and not worth my time! Heck, you gotta pay taxes on it too, and you also run the risk of the unforeseen and problems along the way with a rehab.

Lets see, I paid my fees and got back on MLS last May, and signed up for Privy. Did nothing for 3 months straight but sit at this computer looking at potential on market deals and crunching numbers!

Now I just call or text agents and say hey, I'm a flipper, before I spend time and travel to go look at this listing, how flexible are your sellers? It's not worth the 1/2 hour to hour trip (one way) to go look at a potential deal, then crunching numbers, then spend another hour on all the paperwork required to submit an offer in writing on a MLS deal.

I also used Jerry Nortons "Flipster" last year for the free trial period! What a joke! If you are wanting to take the time and expense to mail people, I'd spend DAYS scrubbing list of people to mail to. If they haven't owned the house for 15-20 years (with a mortgage) then they aren't gonna have enough equity for you to buy it as a flipper. So i couldn't depend on Flipster, and the comps for on market properties or even an off market address I ran through Flipster was WAY-OFF. Nothing beats MLS and training from a broker who'd been in the business 20 years, and partial training from an appraiser, and this was 22 years ago. I had to school a so called wholesaler last week on his comps, lol!

I also tried Property Radar for a trial period in this time as well. Nope.

I stopped doing mailers, cold calls, etc back in 2007 and relied on MLS. I always got my deals and best deals from MLS or wholesalers who used the proven formula of 70% of ARV MINUS REPAIRS MINUS WHOLESALE FEE.

I found out the hard-way my 1st year that 10s of thousands of dollars or all the time out of my life trying to save money and do it myself was not worth it to maybe get 1 deal trying to buy direct from owners.

Best of luck to ya :)

 @Ronnie C. why were you unable to turn 15 specs in a year? Or am I misunderstanding?

Post: How many hard money loans can I take out at once?

Steven BarrPosted
  • Atlanta, GA
  • Posts 159
  • Votes 56
Quote from @David Friedman:

I can tell you from experience that you can only taking flipping so far before it becomes extremely difficult to scale. I've flipped 100 homes a year before in California. Juggling that much hard money and homes becomes inefficient and you are better off taking your profits from flipping and moving into multifamily, commercial or large single-family home developments. Imagine having 100 houses spread out all over an area. Imagine the construction team and project management team you would need to manage that. If it takes you 8 months on a house instead of your planned 4 months, the interest on the hard money took all of the profit from that project. All I'm saying is flipping can easily cascade and you are better off creating a strategy that takes advantage of economies of scale.

@David Friedman it’s funny how these threads age… I ended up scaling my flips to a point where it just makes more sense to get into a strategy that takes advantage of the economies of scale. Single family development is the route I am actively taking. Plus I’m tired of opening up walls and watching $5k disappear

Flipping was a great place to get started, but it’s not the long term answer

Post: Driving for dollars in todays market

Steven BarrPosted
  • Atlanta, GA
  • Posts 159
  • Votes 56

I’ve always purchased my flips from wholesalers, but they don’t seem to be getting any decent deals under contract as of the last several months

I am considering starting to go direct to seller myself. I keep hearing the numbers thrown around that you’ll get 1 deal for every 200 driving for dollars house you write down. This seems EXTREMELY generous. I imagine you’ll only end up getting 20 of those 200 to pick up the phone. So we’re closing 1/20 people we talk to? Seems far fetched to me

Curious what peoples experience has been specifically in driving for dollars, and specifically in recent times


Thanks!

Post: Can’t find profitable fix and flip

Steven BarrPosted
  • Atlanta, GA
  • Posts 159
  • Votes 56

I have been flipping properties for 2-3 years and have done a fair amount of deals. All profitable 

I have 7 houses for sale right now and having some trouble selling them with this market slowdown

Meanwhile, I have been trying to find another deal for the past several months. I’ve probably looked at 200-300+ deals (wholesaler deals, agent deal, on market, etc) and all of them either lose money or break even. It seems as if the market has dropped, but only on the sell side, not the acquisition side. I’m not trying to be greedy and ask too much on discounts for the flips, I am literally just trying to find something profitable

My question is…. Is everybody else having this same problem? Am I in too competitive of a market (Atlanta, GA) bc there are actually people still buying these deals and ridiculous prices? Do I just not have the right people in my network?


Thanks for the insight!