March 2014 Boston Investor Group – Notes & Pics

We had another great event on Wednesday!  This time it was held at our most recent rehab project in Reading so that attendees could see our work first hand.  With the positive feedback I received, I’ll try to do this whenever the timing works out and the rehabs are located in the Woburn or surrounding area.

I feel very strongly about holding these events with a focus on collaboration.  The events usually begin with 15-30 mins of networking as everyone arrives and settles in.  Next, we go into introductions so people have a chance to see who is in the room and whom they may want to speak with later in the night.  After the intros, is the Q&A segment which is structured as an open forum and allows attendees to ask any questions they may have relating to real estate investing.  The group will offer solutions and advice as a community and this is where we see a true collaboration with varying points of view.  I’ve really enjoyed this section because we have a good number of veteran investors who have been kind enough to share a lot of great info.  After about an hour of Q&A, we go back into networking for the remainder of the night.  In addition to our regular format, I shared the deal details on the Reading rehab at this event.

Thank you to everyone who participated and helped to make the event a successful one!  If you are interested in attending a future event, send me an Email with your name to be added to my mailing list.

Below are the notes from the Q&A segment:

  • What type of bank financing did I get on Reading and what were the terms?
    • Commercial rehab loan
    • The bank extended 75% of the purchase and 100% of the rehab
    • 0.5 points down, 5% interest and a 1 year note
    • Was able to close in about 3 weeks
    • The rehab costs were held in escrow and disbursed upon a periodic inspection of the house

 

  • How are people finding properties? (there was a similar question during last month’s event)
    • Consistent marketing, especially direct mail to absentee owners, equity lists, tax liens, driving for dollars
    • Attend networking events to meet wholesalers, bird dogs, real estate agents, and investors
    • Offer a referral fee to anyone that brings you a deal
    • Search the MLS, although this hasn’t been as great a source as it once was due to increased investor competition

 

  • How do you estimate rehab costs?
    • Use the top down approach for both inside and outside
      • For the exterior, start with the chimney cap and work your way down to the foundation
      • For the interior, start on the top floor and work your way down to the basement.  Also, start from the ceiling and work your way down to the floor in each room.
    • Use pricing from previous rehabs
    • Ask a contractor or another investor to walk through the property

 

  • Does a bigger house = less $/sq.ft. to rehab than a smaller house?
    • Assuming the same amount of work needs to be completed, Yes.
      • It generally costs the same to replace a heating system in a 1,000 sq.ft. house as it does a 2,000 sq.ft. house.  The same holds true if you replace a roof on a ranch or a 2 story house that has the same basic width and depth dimensions.  As you can see, many of the big ticket items could cost roughly the same regardless of the size of the house.  Granted, if we are talking about 4,000+ house then this likely won’t be the case.
    • The exceptions will be flooring, siding, and other items that are priced per sq.ft.

 

Here are some photos of the event:

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