All Forum Posts by: Steven Barr

Once you understand the cost of a turnover, you start looking at things differently. For example what can I do to reduce turnover rate? Will a dishwasher help? Or dimmable LED lighting in living room and kitchen? What about a 2nd bath room?

We also finish basements in most of our properties, which costs a lot but does not bring much additional rent, but we have long winters in Milwaukee and that extra space adds significantly to the quality of life. Our average retention is over 6 years.

@Marcus Auerbach this is very insightful.

For the $2,000 improvements, would you mind detailing what that typically consists of?

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Quote from @David Friedman:

50 would be more manageable, but that’s not the right question to ask. Think about how you will scale. What would be more scaleable would be managing as many flips as you feel comfortable managing within the skill of your team and wholesaling the rest of the deals. We would use HM for most of them, but it become too chaotic. Contractors fall off, you miss something because you were too busy working on another project. Because every fixer is different and unique it’s just not scaleable. That being said, do as many as you can, but just start to think about how to scale.

@David Friedman Thanks for the insight! I don’t plan on doing this forever. Just the next few years to take all the profits and dump them into cashflowing single family rentals

Then I would likely move into raising money for Multifamily

1 Vote

Quote from @Andrew Syrios:

With hard money lenders, it depends on them. There aren't nearly as many rules. But hard money lenders are really expensive so I would be very wary of carrying more than one or two at a time. It's just too risky to have that much high cost debt at one time.

@Andrew Syrios I’m finding that hard money is about 12% interest. This is what I would give private investors with todays rates. So the only difference I see is that I have to pay an additional origination fee of 1-2 points on hard money. I feel that if 1-2 points is going to break my deal, then it was a bad deal in the first place.

Do you have any input on a different strategy? Or any input on how I should be looking at this differently?

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Hi BP!

When a tenant moves out of your single family property (say 1500ish square feet) and you have to go fix the property to get it ready for the next tenant…. How much does this typically cost you? What type of repairs are you making?

This is assuming average wear and tear on the property

1 Vote

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 A couple questions here…

Were you using hard money for all 100 homes that year?

Is 50 homes a year more manageable? Or is that still too chaotic?

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Quote from @David Friedman:

Hard money loans are considered private loans so each hard money lender will have different requirements.

You could find several HM Lenders if one were to stop lending to you past a certain point, but I can't really see a scenario in which you would want to have more than 2-4 HM loans going on at once. If you are flipping you should be in and out and you are definitely overleveraging with HM if you have 10 at once.

@David Friedman what exactly do you mean by in and out? It takes me anywhere from 2.5-4 months to acquire, renovate, find a buyer, and have them close on the property.

If I were to only have 4 hard money loans at once, then I could only flip 12 homes per year (assuming 4 months turns). When you mention over-leveraging, are you suggesting I should be using private money instead of hard money? Or are you suggesting that someone shouldn't flip more than 12 homes a year?

Thanks!

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Hi BP!

I have only used hard money 1 time, and don’t remember the specifics of what their requirements were of my personal finances, if any.

I’m curious, how many hard money loans could I take out at a time? For instance… could I fund 10 flips at once if I had the deals lined up?

Thanks!

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Hi BP -

Who are the best property managers for Section 8 housing in Birmingham AL?

Thanks!

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Birmingham, Alabama

Hi BP -

I am closing tomorrow on a property that I recently flipped. I purchased it in July. So total hold time was from July thru November.

I just got a bill from the county for the property taxes ($713.82)

I went online to pay, and saw the $713.82 bill amount was for the entire year of 2022.

Am I stuck with the whole year's worth of property taxes even having owned it for only 5 months??? Or is it like insurance where you pay for 6 months of premium, and then they will send you a check if you don't end up needing coverage for the whole 6 months?

Thanks!

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Hi BP -

I live in GA and my brother lives in NC. We are 50/50 in our LLC. We flipped a property and the attorney's are allowing my brother to do a "mail-away" closing since he is out of state. However, they are trying to make me come into the office to close in person.

I have a full time job and do not have the bandwidth to do this. Especially because we plan to flip many properties. Does anyone have a way around this?

Thanks!

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All Forum Posts by: Steven Barr

Steven Barr has started 85 posts and replied 158 times.

Post: How much does it cost y’all for “turns” between tenants?

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

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

Post: How much does it cost y’all for “turns” between tenants?

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

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

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

Post: Birmingham Property Managers - Section 8

Post: How do you handle paying property taxes on flips?

Post: How to close remotely when selling properties?