All Forum Posts by: Syed H.

that's an insane price without sub-flooring.  It would cost me $1,000-$1,500 max. 

Depends on your lien position and experience of your borrower. 

But, I would never pay a private lender 10-12% for a 1st lien position. I borrow at 9-10.5% (at today's rates, before it was 8.5-9.5%). Most experienced flippers are getting the same as me. Why would we pay a private lender the same as a a HML? Our HMLs are always there and very liquid. I'd rather give them a deal than take $50k from 1 private lender who might not be there for deals later on.

Private money either needs to be cheaper than a HML or take the 2nd lien position or equity/corporate debt. That's how all my deals are structured with private lenders/investors. But like I said, this is how experienced people are doing deals. New flippers will obviously offer to pay you a higher rate and better terms, but that's bc they have no track record.

Pros

• Make lots of money.

Cons

• Not easy to do.
  
• Easy to underestimate Reno/construction 
• Refinance risk

50% vacancy is nuts and means you or your PM is doing something VERY wrong. Covid has made leasing easier in most markets, not harder. Even in places Covid affected leasing, you still shouldn’t be at 50% vacant

Paint, granite, and black/SS appliances are the easiest/cheapest thing you can do to make a unit present better.

Always do a neutral-ish color and make sure you don't paint everything the same color. Do the trims & ceiling one color and walls a different one. A lot of B-D rentals have lazy landlords that throw on the same **** paint on the whole thing. It shows like crap. 

Capex and reserves are two different things.

On larger properties (and middle/institutional level deals), Capex is never included in NOI. In small stuff, it's usually included.

Larger deals are usually bought by people who sell their properties every 5-10 years to hit their return requirements. The capex is usually front-loaded and then not required for a long time. 

Please re-read what I wrote. I didn’t mention you. You said you’ve done 300 deals. Your not new at this. I said anyone who is giving a total new investor 100% financing is an idiot and won’t be in business long.

For a newbie there is no lender that will give you 100% financing, and any Private investor/lender Giving 100% to new people is an idiot and will be out of business soon. 

Even when you get 95% of purchase and 100% of construction, you still need more than 5% to run a deal. You have Other expenses and holding costs that makes it necessary to have more capital. 100% of construction doesn’t mean they cut you a check to go do work. It means you do the work and then they reimburse you. Aka u need that money to do the work. 

With 95% and 100% financing, you still need almost 15-20% to do a deal. With 75% financing you need 30-35%. 

That’s only if you have a functioning unemployment office. With record filings, These offices are flooded. I know more than a few friends who still haven’t gotten their unemployment in NY, which is suppose to be one of the better offices to deal with. 

Lehigh county court wouldn’t take my ejectment filing. They are only taking emergency filings only. Makes no sense but it is what it is.