All Forum Posts by: Troy DeLong

@Stephen Lynch Even better! 10% markup for that is standard.

@Stephen Lynch

- How are you allowing contractors in/out of the property & securing materials? This is where a project manager or General Contractor would come in handy. They can put a lock box on the property. Changing the code after getting quotes and choosing your contractors is recommended. "Boots on the ground" that you can trust is one of the most important aspects of long distance rehabbing. I've heard of people paying their agent a Project Management hourly rate for doing this. 

- Do you have them buy the materials? Do you typically pay 50% upfront? I recommend you have your contractor purchase and manage any and all materials. I work for a general contractor and we've taken payments several ways. 1/3 (Contract signing / down payment), 1/3 (Upon start of services), 1/3 (Upon completion of project). We've also worked with Hard Money lenders and they will not pay until the work has actually been inspected and signed off on. But, this usually costs the Owner a couple hundred dollars for each draw. 

- How are you keeping up on their progress? Ask, ask and ask some more. A good project manager will give you weekly updates, but it never hurts to ask "Hey, where are we at?"

At the end of the day, interview and find yourself a trustworthy local to build a relationship with. Referrals and 'word of mouth' are some of the best to start with on here. Compensate them to where they will work hard for you and will want to put your projects at the top of their list. Always work with licensed/insured contractors and search the internet for reviews on them. 

@Kristin Swineford check out www.TravelNurseHousing.com

It'll vary between the travel agency booking rentals for the nurse, or the nurses booking themselves. You could always reach out to the booking agencies (if you can find who they are) and try to get on their "list". 

Travel nurses are high turnover, so if you worked out a deal with the agency and offered a lower rent, they could help ensure your vacancy rate is as small as possible (if not zero). 

Travel nurses want as LITTLE as possible to do when it comes to the actual 'move in'. Keeping the units semi-furnished and utilities in your name will ensure these travel nurses have as little to worry about as possible when moving in, since they only stay for several months at a time. Just build the utilities (internet included) into your rent price. 

Hope this helps!

@Alan Bostick Even better. I will have him look into that for this deal. Refinancing sooner rather than later, especially with these low rates, would be ideal! Thanks for the heads up. 

@Freddie Williams Using a HELOC to pay cash for properties, and eventually refi after a 'seasoning period' or BRRRR, is a great move! I'm working with an out-of-state investor at the moment and we are under contract on a house that he made a cash offer on using his HELOC.

He was able to get a 5/15 (5 year term @ 15 year amortization) at a little under 4% interest. I believe they gave him a 70% LTV on his primary residence and he has a great credit score.

His plan is to purchase, season for 6 months, refinance, pay off the HELOC, repeat. I'm excited to see how this works out in the next couple of years.

@Belinda Mang If you remove an inspection contingency with your offer, you loss any and ALL negotiating power after your inspection findings. 

With a 401k LOAN, I believe your account assets remain, and you are just borrowing against it. With a 401k WITHDRAWAL, you would be selling off a set number of assets/equities, plus paying penalties and taxes. Every firm/brokerage is going to be different though (especially if you are on an employer plan) so you would need to do some research on that. 

Hope this helps! 

Hey Emma. Lansing is a great place for cash flowing properties. Being the Capital of Michigan, there's tons of government jobs, two major hospitals, a community college, a law school and it's not far from Michigan State University. There are a lot of old properties here in Lansing and they can be great value add properties. I can't speak for Toledo or Detroit. 

Why just SFH? Have you considered 2-4 unit properties? I'm a local agent but am really looking to stick with Investor clients. Would love to chat with you over call/FaceTime. I'd be more than happy to give you a couple references as well.

@Belinda Mang It can be difficult sometimes to reach the Listing Agent in this competitive market to find out what the Seller's motivations are. In this current market, their motivations are most likely high price and quick close. Better yet, a "guarantee" to close (as few contingencies as possible). 

If you are competing with 'Home Buyers' for these houses (people who are purchasing for their primary residence), it will be very hard to beat them and have the investment numbers still work. That's just when you have to call it a day and move onto the next property. 

But, if you are competing with other investors and not 'Home Buyers' (more emotional and less numbers driven), then you can stand a chance. 

Cash, quick closing and no inspections are the big things to focus on. 

What some people do, when they don't have hundreds of thousands of dollars in the bank, is they will take a loan out on their 401k or do a HELOC on their primary residence (If there's enough equity in the house) so they can make offers as CASH on these properties. After acquiring the property, they can refinance into a traditional loan down the road and repay the 401k or HELOC (plus some fees here and there). Those two options aren't always available to people though.

'No Inspections' is gold in the eyes of Sellers. What some people can do is make their offer NOT contingent on inspections, but still request they get a chance to do inspections "for Buyer's benefit". This means the deal moves along no matter what you find in an inspection. Now, if you were to find something BIG during that inspection that was going to be a nightmare if you purchased the property, what you could do, is simply walk away from the deal and the Seller would just keep your earnest money deposit. Now, most Purchase Agreements will allow for this, BUT, some Purchase Agreements state that a Seller could try to sue you (for "damages") in a case like that, so double check the PA you are using. This method of 'No inspection contingencies' could cost you an EMD, but it's one more way to move your offer to the top of the list.

Hope these few things help you on your next offer!

Hey Caleb & Ryann, 

I work with Luxe Development (local contractor) around the Lansing area doing Project Management work. We do everything from a kitchen remodel to a new build. We've gone as far as 2 hours away from the Lansing area if the job is big enough. Let's chat if you're considering some work at any of your properties. 

Palmer Construction (Lansing area) also does great work. Roofing, siding, remodels, etc. 

I'm looking to buy my first multi-unit shortly and would like to create my first LLC to go with it. Michigan is very cheap to create an LLC so I figured why not.

How should I structure this, especially if I plan to buy more down the road (Residential and Commercial)? 

What I was thinking at first was making it so I have some 'Managing' LLC's that owns all of the individual property llc's, with myself being the top leveling owning all of the managing LLC's.

 Top Level would be me, the individual
A) Managing LLC #1 (Residential)
         1) Example 3-unit LLC
         2) Example Duplex LLC
3) Example SFR LLC
   B) Managing LLC #2 (Commercial)
         1) Example Office space LLC
         2) Example Mixed use Downtown space LLC

Is this the best way to do this? Again, LLC's in Michigan are very cheap to create and very cheap to maintain.