I don’t have much to write about today…everything is going as smoothly as I could hope on my first three houses (though two haven’t closed yet, so things can’t be THAT bad). But, I’m finally starting to realize how having multiple properties underway simultaneously (especially when they are in different steps of the process) can really require a lot of juggling and time management. If I’m this busy with just one property owned and two under contract, I can’t imagine how busy I’ll be with several ready to be sold, several undergoing rehab, and several in the pipeline.
Of course, the goal is to have the business a bit more streamlined by then (and maybe have another “helper” as well). So, for now, I just need to ensure that I’m spending enough time working on defining repeatable processes to make future houses a bit more efficient. To give you an idea of the type of stuff I’m currently working on (and what is filling my days), here is a copy of my current to-do list, as it stands this minute:
General
- Plan for Building Business Credit
- Get Biz Phone Line
- Get DUNS Number
- Investigate RealQuest for Comps
- Find Contract Attorney and Setup Meeting
- Financing Investigation (Commercial Loans)
- Financing Investigation (Hard Money Loans)
- Get New Cell Phone w/Email Capabilities
House #1: The Corn House
- Take Video Before Work Starts
- Get Completed GC W-9 Form
- Update Mailing Address for Property Taxes
- Pick Out Countertops
- Pick Out Cabinet Colors
- Pick Out Cabinet Door Style
- Pick Out Exterior Trim Colors (and Shutters)
- Pick Out Shower Door Style/SKU
House #2: The Bulge House
- Get Response from Bank on Renegotiation
- Get Underwriting Status
- Find Updated Rent Comps
- Get Section 8 Rent Estimates
- Talk to Neighbors
- Decide on Rent/Sell
- Define Scope of Work
- Define Materials List
- Get HVAC Price Quotes
- Get Plumbing Price Quotes
- GC Walk-Throughs and Price Quotes
- Pick a GC
- Get Landlord Insurance
- Get Closing Date/Attorney
- Take Video Before Work Starts
House #3: The Second Chance House
- Submit Loan Info/Docs
- Investigate HML/Refi Loans
- Get Loan Appraisal Scheduled
- Get Water Turned On
- Get Electricity Turned On
- Get Gas Turned On
- Schedule Inspection
- Take Before Pictures
- Decide on Rent/Sell
- Define Scope of Work
- Define Materials List
- GC Walk-Throughs and Price Quotes
- Pick a GC
- Get Landlord Insurance
- Get Closing Date/Attorney
- Take Video Before Work Starts
Next Houses
- Do Walk-Throughs of Four Houses
- Lunch with Ian (HomeVestors)
- Talk to Toni (Coldwell Banker)
While this may not seem like an overwhelming list of things to do, keep in mind that many of these things are time sensitive. For example, both The Bulge House and The Second Chance House are in their “due diligence” periods, and so I only have 7-10 days to do things like turn on utilities, get inspections, submit loan docs, get appraisals, etc. Once that due diligence period is over, I’m pretty much stuck with the property, regardless of what I find down the road. And while things like pictures and videos don’t really seem that much of a priority, I think I’d be disappointed if we get to the end of these projects and don’t have documentation. With demo starting on The Corn House tomorrow, I really need to get that video done today (and yes, I’ll post it!).
Okay, back to work…
Really enjoy reading your work and the process. My wife and I are in the beginning stages of REI and find this blog so very useful. Would you be able to elaborate on what type of financing you were able to secure in order to own 3 properties at one time without a steady stream of income? This seems to be my biggest hurdle, I work full time, make around $200k a year so cash flow is stong, we don’t have the reserves built up yet,but reading about how you were able to purchase 3 homes at once makes so interested in understanding how you achieved that. Thank yo so much and look forward to your reply
Hi Tony,
Over the years, we’ve financed our projects in a number of different ways, including:
1. Paying with our own cash
2. Using conventional loans through a big bank (this was tough because they wouldn’t finance an investment loan unless the house was in good condition)
3. Using portfolio loans from small, local banks (this is the best option for newer investors in my opinion, especially if you have decent credit and income)
4. Private lenders (this is borrowing from friends/family/associates/other investors who are looking for a decent return on their money, and this is our preferred way to finance our deals now)
#4 is what we use most these days, and we actually have a lot more offers for financing than we can use (we can’t find enough deals to take advantage of all the people who want to loan to us). You’ll find that as you gain experience and others start to recognize that you’re good at rehabbing, they’ll offer to invest with you, as they can get better returns than they can in most other places, and they’ll view you as a pretty safe investment.
Thank you for the reply, as always very helpful.