All Forum Posts by: Zach Mitchell

@Brandon G. This is a very late reply but I came across this post in a search of mine and wanted to provide some future reference for you and others. If you ended up presenting exactly what you stated, I'm sure it was more than enough for the loan officer to begin their underwriting. They will also want a personal financial statement, which they usually have a specific form for, and they will want two years of tax returns. I recently sent a financing request package on a multifamily building to a few lenders and included some basic information on the property, some pictures, my plans for renovations, general market information, and a pro forma/financial projections. This was for a 24 unit property though, not just a duplex. I'm sure what you provided was more than what they normally see. Hope you were able to get it!

I wanted to bring this back up. @Samuel S. Did you ever get an answer to your last question? I'm in the process of raising about $400k for a value-add multifamily deal and plan on a majority of the investors to use their retirement account funds. @Mark Nolan I've been told by an attorney that for a deal this small (Under $1MM all in) that I am fine just using an LLC and shouldn't have issues using retirement funds from investors. Any insight would be much appreciated.

@Reggie Maggard There are a lot of hotel condo concepts out by the theme parks. Pretty much a hotel that sells the units individually but it still operates like a hotel. I'm sure the expenses would be higher but I think the idea is that it's completely hands off on the owners end. I don't know what the returns are like, just throwing that idea in the mix for you. 

John Baker I beat these guys up on price so much that by the time we are at a final number I don't mind paying the 50%. Think the last refinishing we did was the same way. He was also like 40% less than another bid. Some people want money up front, others don't ask for anything until the job is done. I really just base it all on my relationship with the person but if it's our first time working together I just feel them out and go from there. There's no science to it, just do what you're comfortable with and make sure to learn along the way.

John Baker 50% is pretty standard for something like cabinet refinishing. No reason to be concerned about that unless the guy doesn't seem professional and running a proper business. If that's the case then you shouldn't be working with him anyway. As for your other question, short answer is yes. Just tell him what you want everything in the contract. He probably won't agree to your $100/day but at least he will understand the urgency you're trying to create.

My builders risk doesn't cover theft but I think you can add it on for an additional cost. It all depends on who your carrier is though. Our best option has always been with Tapco. 

Jerry Stanford Make sure to get insurance on the property. You can get a builders risk policy or vacant but builders risk is probably best. It's rare but the worst can happen, I would know. One of our projects just had a large fire caused by some older wiring in the attic. Luckily, no one was hurt except for the home but this is definitely one lesson I will never forget. It sucks to pay a couple thousand for such a short period, which is why a lot of people don't insure their flips. Glad I'm not that much of a risk taker or we would have just lost a couple hundred thousand dollars. I don't think that would have gone over well with our investors.

@Katie Foster I'm with one here in Orlando that charges a monthly fee of $200 plus $100 on each transaction. So, $2,400/year plus another $100 on each deal. It pays for itself with one deal. You just need to find an investor friendly brokerage. You also have to pay all of your own MLS fees but I think that's pretty standard.

If you can't find one similar to this then you can call around to all the local ones and see if they will set something up just for you. Just ask if they would be open to a 100% commission for a set dollar amount per transaction.

It's well worth it if you're actually completing transactions. You can use it as leverage on the buying side by leaving the commission in the deal or offering slightly more because your side of the commission will offset 2-3% of the purchase price, or many other ways. Then you will save 3% on every sale when you sell it yourself. If you buy and sell 3 houses in a year at an average of $200k, that's $1.2MM in transactions, or a savings of about $36,000. It's definitely more work since you will now be doing the job of the realtor for yourself but from the money I've saved I would get it again without question.

Isaac Green The closing costs are going to vary state by state but the commissions are almost always paid by the seller. You don't pay re commission as a buyer. Call the title company/closing agent who is handling the closing and they can provide the estimated costs for purchase and will probably help you out with backend sale as well. As a seller here in FL, you're typically paying about 6% for re commission, unless you sell yourself, and an additional 2.5-4% in closing costs. Personally, I always just use 6% in total but that's because I sell my own houses. Hopefully someone from NY can chime in. Good luck.