How to Build Your Multifamily Real Estate Rehab Budget

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This Money Monday, learn the ropes in building your multifamily rehab budget.

VIDEO TRANSCRIPTION

00:00
mondays monday mondays we apologize we
00:02
are a little bit late but for those of
00:03
you
00:04
that are fans of the show you know we do
00:05
this every monday 3 30 central
00:07
3 39 3 38 central um
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basically you know we talk about
00:12
spending you know 15 20 minutes talking
00:13
about different topics and then we’ll do
00:15
10 minutes q a
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so with that said since i know we’re
00:18
tight on time
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then i don’t need to hear anything about
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your weekend
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i really don’t care much but we can talk
00:24
about this weekend was pretty good but
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let’s get right into multifamily let’s
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get right into what we’re talking about
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today which is how to build your
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multi-family rehab budget
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i think it’s an important thing i’ve
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talked about it quite a few times
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we’ve been in the trenches from actually
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running crews to
00:40
doing draws to you know managing the
00:43
money on the whole
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thing so uh okay so let me make ben go
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out there with a hammer
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sometimes paint brush and kind of get it
00:48
done right right you know i don’t do a
00:50
very good job but i
00:51
am available if anybody needs me you
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know that’s a very honest guy as well
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you know
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so all right let’s start off with you
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always have to do your due diligence
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right
00:59
you know so this starts from when you go
01:02
and look at the property on the property
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tour right
01:04
you are at that point developing not
01:06
only your business plan but your rehab
01:07
plan
01:08
so you need to say are those roofs good
01:10
or am i going to have to replace them
01:12
you know do i see foundation issues does
01:14
the exterior need a new paint job does
01:17
you know do you need a new fence which
01:18
everybody knows that my one of my pet
01:20
peeves is a new fence
01:21
absolutely you know just new signage at
01:23
that point you should be
01:24
developing at least on a high level
01:27
what your rehab plan and budget should
01:29
be right and then you need to bake that
01:31
into your announcements
01:31
i like to tell people right you don’t
01:33
know the answers until you really dig in
01:35
right so initially you need to get some
01:37
you need to get some comfort with this
01:39
right yeah start talking to friends that
01:41
have done it start trying to get a feel
01:42
for how much it might cost to replace a
01:44
roof or restrip a parking lot right
01:46
you know you need to be close enough
01:47
with the budget before you get under
01:49
contract
01:50
right and then once you’re kind of
01:50
getting under contract you’re doing the
01:52
dd then that’s whenever we start the
01:53
delta is across the t’s right yeah
01:54
so you know you really want to be plus
01:56
or minus 15 right barring any surprises
01:58
and so
01:59
you know you’re not going to know it up
02:00
front don’t waste your time getting a
02:01
detailed budget
02:02
before you get under contract you’re
02:03
going to waste a lot of people’s time
02:05
well yeah nobody’s going to give it to
02:06
you anyway
02:06
yeah i mean like you’re either gonna pay
02:08
for that right which is gonna start
02:10
adding up if you’re looking at multiple
02:12
deals a month
02:13
um or you’re just gonna have to eyeball
02:15
it a little bit and that’s where ferris
02:16
kind of
02:17
brings up a good point which is you know
02:19
get a general contractor that you that
02:21
you like know and trust
02:22
develop that relationship and say you
02:24
know and then you can start kind of
02:25
picking their brain a little bit and you
02:26
start getting an idea of how much this
02:27
stuff’s gonna cost right
02:29
you know and you know as long as you put
02:31
a contingency in there
02:32
right which is usually five ten fifteen
02:34
percent uh you’re usually going to come
02:36
in under that right
02:37
so um also talk to the broker and find
02:40
out exactly what the previous owner has
02:42
done too right
02:43
you know i mean how much money have they
02:44
spent what did they do
02:46
right and you might they might say oh
02:48
they replaced the roofs you know three
02:49
years ago and you look at it you’re like
02:51
they must not have replaced every single
02:52
one of them which is what we’ve seen
02:54
right you know and sometimes what the
02:56
broker is telling you is not actually
02:57
true either that’s why
02:58
the best way to estimate some of this
03:00
stuff is just to get on site
03:02
because you’ll get a good feel of what
03:04
are those just photoshopped
03:05
photos or is this legit and does the
03:08
does the work look good right so you
03:09
need to examine what the previous
03:11
owner’s done too
03:11
right and are they getting a good return
03:14
on their investment and that only means
03:16
not only the exterior stuff but on the
03:17
interior upgrades too right
03:19
yeah so understand the property
03:21
demographics i think that the one thing
03:22
i always bring up this example right you
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know people always
03:25
knee-jerk to putting a um a playground
03:27
on on-site right and we’re all big we’re
03:29
big proponents of
03:30
building a community too but if you
03:33
don’t have any kids on site then why are
03:34
you going to put a playground on there
03:35
that 25 grand that you’re going to spend
03:37
on that commercial grade
03:38
you know playground is probably better
03:40
spent i don’t know maybe improving the
03:42
pool
03:43
because you have a bunch of single folks
03:45
so that’s something to think about what
03:46
is the demographics what is the
03:48
you know the tenants what’s the you know
03:50
what are they made up of right is it
03:52
families versus single people right
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uh and also analyze the sub market what
03:56
are what are people in that sub market
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looking for in terms of
03:59
upgrades not only interior upgrades but
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amenities
04:03
right you know you might find out that
04:04
you’re competing against uh
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a bunch of properties that have you know
04:08
package delivery or
04:10
you know a bark park or they might have
04:13
this or that amenity
04:15
and you need to maybe really think you
04:17
know twice about maybe adding that into
04:19
your rehab plan which
04:20
you know you might not know that until
04:22
you start studying the sub market
04:23
right because you know if you just go
04:25
out there and you say all i’m going to
04:26
do is cure deferred maintenance well
04:28
that might not be
04:29
driving the most value to so it’s a give
04:32
and take between
04:33
doing the things that you have to do
04:35
which is deferred maintenance
04:36
versus the things that you want to do
04:37
that’s going to drive value right
04:39
and you’re never going to be able to do
04:41
all of them you know i’d say every
04:42
single one of our deals we probably
04:44
could have put an extra what million two
04:45
million dollars in every single one of
04:47
them
04:48
these deals they eat money and
04:51
a lot of times you’re taking it over
04:53
from uh you know a seller at least in
04:56
you know when we started off from a
04:57
seller that was not taking care of the
04:58
property
04:59
and you have to put a lot of money into
05:01
them so
05:02
you know you need to understand that too
05:04
right but ultimately i’d say look for
05:07
low-hanging fruit
05:08
right you know some stuff that we love
05:09
to do that is just
05:11
immediate pops right is curb appeal on
05:14
the landscaping right
05:15
getting a new sign in there or just
05:17
getting better lighting
05:18
or better positioning of the current
05:20
signage you know we didn’t spend a whole
05:22
lot of
05:23
money on one of our san antonio property
05:24
signage but we just moved it up
05:27
got a better color and then put light on
05:29
it and now going down the highway you
05:30
can see this thing it’s like a bright
05:32
red shining object on the on the side of
05:34
the highway and i love it and we didn’t
05:35
really spend that much money on that
05:37
right you know but that’s some stuff and
05:39
then you know kind of more expensive
05:41
stuff would be a new paint job
05:43
or new restripe and reseal on the
05:45
parking lot yeah so maybe let’s back up
05:47
a little bit right
05:48
since you know let’s say i’m a newer
05:49
investor i’m
05:51
looking at 70s deals yep what are the
05:54
biggest
05:54
capital items that are not obvious right
05:57
and what i mean by a lot of it’s like
05:58
okay
05:59
siding is trash patios are trashed i
06:01
know those maybe
06:02
and maybe not obvious not necessarily
06:04
just physically but cost wise right so
06:06
actually a good example is patios
06:07
patios you look at them you can get a
06:10
sense of sometimes they need some work
06:11
or not yeah but there’s actually a lot
06:13
of times there’s hidden costs that you
06:14
don’t really realize until you get
06:15
someone in there right
06:16
you know doing the the face of a patio
06:18
is really cheap but if you actually need
06:19
to do the beams and
06:21
redo the whole thing there’s actually a
06:22
lot of coffee can start adding up so
06:24
maybe what you know let’s just talk
06:25
through a few of those key things right
06:26
i think
06:27
spoilers is an obvious one i know you’re
06:29
going to talk about that one we have
06:30
killers or chillers we had one go out
06:32
today of a boiler thankfully no choice
06:34
but no no we’ve had we’ve had properties
06:35
that have had chillers
06:37
and so you need to realize that those
06:39
things go out and they always go out at
06:41
the worst possible time
06:42
so if you have a chill or you have
06:44
boilers you need to bake that in not
06:45
only your operating budget and
06:46
maintaining those
06:48
but you might have to get them inspected
06:50
ahead of time and see if any of them are
06:51
on the last leg and if they are get that
06:53
into your rehab plan yeah during due
06:54
diligence definitely get
06:55
a plumber out there and take a look at
06:57
your boilers right get a sense of it and
06:59
kind of yeah what’s going on there so
07:00
boilers we talked about balconies that’s
07:02
a big one
07:03
i’ll just say plumbing in general right
07:04
scope some plumbing lines or or get
07:06
somebody that’s gonna
07:07
go out there and test if there’s any
07:09
lines that are broken but
07:10
speaking from experience i will tell
07:12
people right our experience has been
07:13
that you can scope it and it’ll still go
07:15
bad the next day no
07:16
but i was talking about the other so
07:17
there’s another there’s a new test that
07:19
we found out
07:20
you know from our san antonio well
07:21
pressure test and also smoke test too
07:23
right
07:24
you know where they can now determine
07:25
that’s actually cheaper than scoping a
07:27
lot of the lines too
07:28
you know um if there’s breaks in the
07:30
line how bad are the brakes where the
07:32
brakes at
07:33
and then you you’re not gonna
07:34
necessarily get a 100 sense of how much
07:36
that’s going to cost you
07:37
but you can at least figure out how bad
07:39
the property is in terms of plumbing
07:40
breaks
07:41
right um typically you’re going to do
07:43
that on 60 70s assets right
07:46
um because this stuff’s just going to be
07:47
coming up on its you know it’s useful
07:49
life and i’d say parking lots right
07:50
partner let’s give people some numbers
07:52
right replacing the roof on a building
07:53
depending on the size of the building 15
07:55
20 grand right
07:57
per building well yeah per billion per
07:59
building right yeah all right then you
08:00
know going from there right
08:02
parking lots you can spend anywhere from
08:03
20 to 100 000 right if you’re having a
08:05
repay
08:06
yeah that’s what i was going to say so
08:07
there’s a difference really expensive
08:09
there’s a difference between reseal and
08:10
re-stripe
08:11
we do recommend reselling and striping
08:13
it’s really not that expensive it gives
08:15
it that new color right
08:17
that it’s missing but that says still
08:19
apart is still trashed
08:20
it’s not a really good idea but really
08:22
you know it’s 15
08:24
20 grand i mean again it depends on the
08:26
size of the parking lot i would say yeah
08:27
you know you can you can put 30 range
08:29
right probably at
08:30
various sizes in terms of how much it
08:31
costs to resell restrict right just
08:33
depends on the size of the property yeah
08:34
but now if you’re
08:35
having to you know do patch repairs or
08:38
repave it
08:39
gets expensive pretty quickly so
08:41
definitely something to kind of be aware
08:42
of
08:43
painting i mean we’ve seen it you know
08:44
150 to 250 units right you know you’re
08:47
probably cost it’ll probably cost you
08:49
150 200 grand
08:50
now that is to power wash you know
08:54
do some woodwork and probably do at
08:57
least three different types of paint
08:58
right you’re going to have your black on
08:59
your
09:00
your um your handrails right you’re
09:02
going to maybe have
09:03
a paint um a certain paint on your doors
09:06
right to have a little bit of pop
09:07
and then you’re gonna have your exterior
09:08
what does that look like so there’s your
09:10
three colors
09:11
right so typically that’s gonna that’s
09:12
gonna be for the whole entire property
09:14
um those are gonna be some big things
09:15
right you know um but yeah
09:17
your signage you know gonna be anywhere
09:20
from i’d say
09:21
good monument type signage anywhere from
09:23
10 to 30 grand
09:24
um commercial grade um you know
09:27
playgrounds like we talked about earlier
09:29
gonna cost you minimum 20.
09:31
uh you might be able to find them
09:33
cheaper somewhere right but then you
09:34
gotta get something to put them together
09:36
so you know if you’re going to go
09:37
through your general contractor you’re
09:38
going to be minimum 20
09:40
and upwards we’ve seen them really
09:42
expensive i just thought of a good one
09:43
subfloors
09:44
if you’re walking into touring a
09:45
property and the floor is kind of yeah
09:48
that could get really expensive really
09:50
fast be aware of that right
09:52
you can see that on the tour dig in from
09:54
there right i mean that one is one that
09:56
is kind of a hidden cost
09:58
a lot of times you know people try to
09:59
just put stuff on top of it and not
10:01
really realize it but if you’re actually
10:02
going to do those repairs it adds up
10:03
very quickly
10:04
yeah and so let’s talk about the stuff
10:06
that you’re going to see on the property
10:07
tour
10:08
right because once again the broker is
10:09
going to be manicuring your your path
10:11
through the property he’s going to be
10:12
showing you the best part of it
10:14
uh the best units he’s going to try to
10:16
not bring you to that back side of the
10:18
property that might look a little bit
10:19
and disrepair right
10:21
so take that with a grain of salt but
10:23
you’re real when you’re dialing in those
10:25
numbers is when you’re doing your
10:26
on-site due diligence after you’ve
10:28
gotten under contract
10:29
right you know because that property
10:31
tour is gonna maybe be
10:32
30 to 45 minutes long and sometimes you
10:35
can have a general contractor with you
10:37
if they’re available but
10:38
i mean how many times uh you know you’re
10:39
are you going on property tours and is
10:41
your general contractor always going to
10:42
want to be in tow with you probably not
10:44
so you got to take that into
10:45
consideration now once again so the real
10:48
the real digging in is after you get it
10:50
under contract and that’s when you need
10:51
to have plumbers out there you need to
10:53
have a general contractor you have a
10:54
roofer
10:55
you need to have all these trades that
10:56
you feel might be needed you need to get
10:58
some real world numbers and anything
11:00
that’s going to blow up your budget
11:01
right that you weren’t aware of like say
11:04
there’s
11:05
200 000 worth of plumbing problems that
11:07
you couldn’t have seen during a property
11:09
tour
11:10
may or may not be justification for a
11:12
retrade right and a retrade for people
11:13
that don’t know
11:14
is a renegotiation of the contract and
11:16
the purchase price
11:17
right um and we’re not advocating that
11:19
we try not to do that as much as we can
11:21
but sometimes if there’s a legit reason
11:23
and that would be in the legit reason
11:25
um then maybe you need to go back to the
11:27
seller and see if you can get some money
11:28
off right just to pay for those repairs
11:30
so kind of moving along right so we’re
11:31
talking about interior units and
11:34
upgrades
11:34
right because we’ve been talking about a
11:36
lot of the exterior stuff and the
11:37
mechanical systems
11:39
you know um what’s your upgrade plan
11:41
gonna be on your interiors you need to
11:42
get with your property management
11:43
company right
11:44
you know um what are they usually
11:47
upgrading units for what is their cost
11:49
you know um because most of the time
11:51
they’re gonna be able to give you what’s
11:52
an appliance package gonna cost
11:53
how much is a backsplash going to cost
11:55
what’s your flooring cost going to be
11:57
right so they can help you dial that in
12:00
and based on what you know of the sub
12:02
market right and what the other
12:03
competition is doing in their interior
12:05
upgrades you can kind of dial in what is
12:07
your interior upgrade
12:08
upgrade plan get a b right and how much
12:11
is that going to cost
12:12
typically depending on you know how
12:14
rough the tenants are going to be on the
12:16
on the property
12:17
if you’re going to upgrade it it’s
12:18
probably anywhere from three to seven
12:20
grand
12:20
so just take that into consideration so
12:23
and we don’t typically come in and say
12:24
oh i’m gonna earmark
12:26
seven grand for a hundred percent of the
12:27
units right it’s usually going to be
12:29
you know six to seven for fifty percent
12:31
of the units you know leave a little
12:33
meat
12:33
on the bone for the next person that’s
12:35
buying the property right and you’re
12:36
also just going to need to spread the
12:38
love of your rehab budget
12:40
over other things too you’re not going
12:41
to just do interior upgrades
12:44
right you know your property management
12:46
company can also give you a time frame
12:47
of
12:48
you know based on what they think the
12:49
turnover is going to be and what they
12:51
know of the sub market
12:52
how quickly can you pull this off you
12:54
know a lot of people underwrite these
12:55
deals like they’re going to 100 get
12:56
their
12:57
the rehab plan done in 12 months i’m
12:59
going to tell you in reality it doesn’t
13:00
it’s not that quick
13:02
right because maybe your turnover is
13:04
less than you thought it was going to be
13:05
we have one property in atlanta a
13:06
property that we love we can’t get
13:08
anybody to move out
13:09
you know so almost going on three years
13:12
we still have money in our upgrade plan
13:14
the lender is getting mad at us saying
13:15
hey we got to spend the money i’m like
13:16
what do you want me to do i can’t kick
13:17
people out just to upgrade their unit
13:19
right but that’s you know that’s because
13:21
they love the property
13:22
they’ve been there for a while and
13:24
they’re not moving out right so just
13:26
take that into consideration when you’re
13:27
running your numbers is that
13:28
you know even if you’re gonna do that
13:30
hundred units that ain’t gonna get done
13:31
in 12 months
13:32
right i would say minimum it’s 12 to 18.
13:35
probably even closer to 18 to 24. right
13:38
so take that into consideration right
13:40
and i always say always leave a little
13:41
bit of wiggle room on your rehab
13:43
you know have a contingency like we
13:45
talked about earlier 5 10
13:46
15 and i would say that wiggle room
13:48
really it grows exponentially
13:50
meaning if i’m doing a million dollars
13:53
rehab
13:54
maybe i put 10 percent like you’re
13:55
saying right yep i’m doing 10 million
13:57
dollars of rehab maybe i put 20
13:59
right possibly i mean they’re just so at
14:01
the dollars
14:02
there’s so much more than go wrong and
14:04
so really i mean we’ve learned right
14:06
have more cash than you need it’s
14:07
trivial to raise a couple hundred more
14:09
thousand dollars from your investors
14:10
it really impacts returns yeah you know
14:12
minimally but it gives you
14:14
a lot more safety net for you and your
14:16
investors and so one thing before we go
14:18
to q a right i wanted to kind of give a
14:20
little bit of
14:20
tips on this right be not vague
14:24
but just be general when you give your
14:26
rehab plan and budget to your
14:28
to your lender because they will they
14:30
will hold you to that right if you say
14:32
i’m going to do 63 units
14:33
and each of those 63 units is going to
14:35
have these five things in it
14:37
guess what they’re going to expect you
14:38
to do 63 units
14:40
and they’re going to expect each one of
14:41
those 63 units to have those things in
14:43
there
14:43
right whereas instead how i position it
14:46
is interior upgrades
14:48
what does that mean i don’t know how
14:49
many units are we going to interior
14:51
upgrade
14:51
who knows right as long as i’m drawing
14:54
for that
14:55
from our lender and it’s it’s a legit
14:58
interior upgrade
15:00
they’re going to go for it right so it
15:01
keeps it keeps your your budget a little
15:03
bit more flexible
15:04
the other thing i’m going to point out
15:05
too is you know reallocation of your
15:08
rehab budget it’s not a straightforward
15:09
thing so say you came in under budget
15:11
say you had
15:12
two hundred thousand dollars in roofs
15:13
and you were able to get it done for a
15:15
hundred
15:15
you think wow great maybe i could use
15:17
that hundred grand on something else
15:19
well it’s not that easy right most of
15:20
the time the lender
15:22
may let you reallocate but they’re gonna
15:24
want you to do everything else first
15:26
then they’re going to look at it then
15:27
they’re going to want to get approvals
15:29
and so that 100 grand is going to be
15:30
caught up in that escrow for
15:32
months and then maybe you can move it to
15:34
say
15:35
interior upgrades because you want to do
15:36
a few more units right so take that into
15:39
consideration
15:40
uh the other thing is too have cash on
15:42
hand
15:43
cash is king in these deals the draws
15:45
are there that’s your money
15:47
but guess what the lender does not make
15:48
it easy to draw for that money
15:50
and so if you have the if you have
15:52
vendors you have general contractors
15:53
that are looking to
15:54
you know to get paid they’re gonna have
15:56
to either realize that it can take
15:58
months to go through the process or you
16:00
need to have money to pay them first
16:02
then wait to get reimbursed right so
16:04
cash management is king
16:05
ask us how we know our first few deals
16:07
we didn’t do as good a job as we
16:09
probably should have
16:10
and uh we’re not gonna make that mistake
16:12
again right so always
16:14
you know have a little bit of extra
16:15
reserves when you’re doing your rehab
16:17
because that’s gonna just make the
16:18
process a lot more smooth
16:20
right so man i blew through that a lot
16:23
more quickly than i thought i was you
16:24
didn’t you took forever we only have
16:26
four more minutes left for our guest so
16:27
monday mondays
16:28
for every monday 3 30 central i let ben
16:30
do the talking while i just sit here and
16:31
hang out with you all online
16:33
you know he enjoys that i enjoy this
16:34
it’s a win-win relationship
16:36
um you know we do talk about different
16:37
topics if you have ideas for future
16:39
topics let us know
16:39
otherwise shanna will guess something
16:42
right she’s really good at that one she
16:43
does a great job
16:45
um but you know that said we’re in the q
16:47
a section so if you have questions let
16:48
us know
16:49
but that said really quickly let’s kind
16:50
of go through some of the comments that
16:52
came in so
16:52
all right uh ronnie asked where’s the
16:55
district branded play at plaid shirts we
16:57
don’t yeah i got a disrupt
16:58
break we need a shirt let’s have plaid
17:00
shirts get one of ronnie
17:02
that’s true actually um
17:05
how have you all adjusted rising rehab
17:06
costs these past few months on new deals
17:08
that’s a good question right i mean for
17:10
those of you that don’t know wood has
17:11
gotten really expensive asked me i know
17:13
i built a
17:14
wooden thing and it’s like man i don’t
17:15
remember paying that much for two by
17:16
fours
17:17
but i mean it depends on the kind of
17:18
rehab you’re doing and ultimately talk
17:20
to your contractor they’ll know where
17:21
things are changing
17:22
yeah i mean i know i know because of
17:23
cobit appliance packages went up too
17:26
right you know because at the time there
17:27
was a shortage on a lot of the stuff
17:28
that was coming out of china
17:30
there was a long lead time as well uh
17:32
you just need to bake that in and once
17:33
again your general contractor your
17:34
vendors or even your property management
17:36
company
17:37
will give you some insight as to you
17:39
know how long is this going to take
17:41
how much is this going to cost you know
17:43
go to the experts yeah so jefferson says
17:45
howdy
17:46
howdy hey hey jefferson savion says
17:48
what’s going on fellas like
17:50
i feel like i didn’t get to talk to him
17:51
enough with the the conference no no he
17:53
came up and said hi
17:54
buddy i didn’t get a chance to i was
17:56
about to go onto a panel but uh
17:57
i appreciate you coming in likes that
17:59
camera angle switch we now thank you
18:01
ronnie says how to find good contractors
18:03
for interior upgrades most pcs don’t
18:04
like doing interior that’s true that’s
18:06
that’s actually a great point
18:07
thank you ronnie you know i think yeah
18:09
once again it’s probably going to be
18:10
more of a local person
18:12
more of a handyman um you know if you’ve
18:15
got a big enough crew on site maybe you
18:16
can pull it off you know internally too
18:19
it just depends i would i would once
18:20
again work with your property management
18:22
company and say
18:22
who do you suggest and they’re going to
18:24
typically have a couple and talk to
18:25
other owners
18:26
yeah right iggy says hi hello
18:29
did he come out to the conference no i’m
18:32
disappointed
18:33
but but we’re going to see him in
18:35
florida either at the next m fin
18:38
or next mfm maybe so are we doing where
18:40
we’re doing miami
18:42
we’re 90 sure i’m going to schedule
18:44
tomorrow we’re getting we’re going to
18:45
we’re
18:46
not getting the next m in miami in
18:50
july so you’re ready what is it july
18:52
24th what’ll be closer for you
18:54
july 24th hopefully god willing miami
18:58
we all need some beach time all right
19:00
let’s keep going so
19:01
uh jefferson says how long does it take
19:03
now for the draw process of lender on
19:05
giving you the money it is
19:06
i mean it’s a two to two year two month
19:09
to two year process
19:10
that’s my answer to that i would say
19:12
we’ve seen it as long as six months
19:14
i’ve seen it as quick as about four to
19:16
six weeks it typically is
19:18
not and it that it’s it and it’s all
19:21
over the map and each lender is
19:23
different
19:24
each you know um asset manager and and
19:27
their team is different so
19:29
you just need to know that you will have
19:31
some time in between when you submit
19:33
that
19:34
and when you’re gonna do it and that’s
19:35
the other problem too is that you might
19:37
be submitting for things that had
19:38
happened for maybe
19:39
a couple months prior to that and then
19:41
you’re then you’re also
19:42
waiting four to six weeks on a minimum
19:44
after that so there could be months in
19:46
between there
19:47
yeah you know so let’s keep going then
19:48
so john our buddy john montero says and
19:50
he’s got a great comment
19:52
what do you got blank is the best what
19:54
is the blank
19:55
blank is the best and what is that
19:57
what’s what what went in the bank blood
19:58
and the blank
20:00
the what and the who the banks the black
20:01
stuff shanna is the best is the best oh
20:06
uh we’re calling her out i wanted to see
20:09
what ben said if he was going to be full
20:10
of himself and say ben
20:11
is the best or my name is not ferris all
20:13
right bro like come on
20:14
no uh ronnie says future topic idea
20:18
bring jackie on to talk about property
20:19
management we can we should yeah so we
20:21
can’t
20:21
yeah she’s been she’s been on the road
20:24
looking at all of our deals for
20:26
last you know three or four weeks so
20:27
yeah so let’s see so ronnie says how
20:29
much working capital do you underwrite
20:30
nowadays oh that’s so deal specific
20:32
well yeah i mean you’re going to have to
20:34
have you know reserved
20:36
a 6k adore minimum kind of on the
20:39
i just it’s just uh yeah man i mean i’d
20:41
say at least
20:42
10 to 15 of your you know
20:46
i’ve seen it where you know people need
20:47
to have a month of you know
20:49
operating expenses and note to two
20:53
months to three months that’s kind of
20:54
how i look at it
20:55
um but you know it’s it’s substantial at
20:58
this point right because you can always
20:59
give it back too
21:00
right that’s what people forget you know
21:03
say you
21:04
you only you only want to have some
21:05
additional reserves during your rehab
21:08
you know and then maybe after that’s
21:09
done you’re like why am i sitting on the
21:11
money maybe you hold on to a little bit
21:12
then you give the rest back to your
21:13
investors right
21:14
as a return of capital um you certainly
21:17
could do that too
21:18
so absolutely you know it might be a
21:19
good way to to to skin that cat but
21:22
all right well i already got through it
21:24
any more comments questions otherwise
21:25
we’re at time and we’re
21:27
whoa whoa whoa whoa whoa whoa really
21:29
quickly a couple things
21:30
well we’re talking about the toolkit man
21:33
don’t rush me
21:34
keep going all right so just embarrass
21:36
is all about we got to be done at four
21:38
all right
21:43
so disruptequity.com this is where all
21:44
of our checklists all of our webinars
21:46
all podcasts that we’re on shannon does
21:48
a great job keeping that up to date
21:50
um it’s all there you know so check that
21:52
out if you would
21:53
uh like we talked about mfin is coming
21:56
up
21:56
too so we probably will have something
21:58
about that next couple weeks once we
22:00
nail that down
22:01
but think july think miami um next week
22:05
fun topic accredited versus
22:07
sophisticated
22:08
what does that mean right you know
22:10
there’s a lot of people coming into the
22:11
space
22:12
am i accredited am i sophisticated
22:14
what’s the differences
22:15
why does that matter to a sponsor why
22:17
does that matter to a passive investor
22:18
right
22:18
so we’ll go through you know soup to
22:20
nuts a to z that whole entire process
22:22
right
22:23
and probably get into you know so a
22:24
sponsor or passive investors probably
22:26
like that topic
22:27
so check that out next week we blew
22:30
through this one
22:31
sorry we’re eight minutes late i’m going
22:32
to blame ferris
22:35
but i think we’re about ready to wrap up
22:36
wrap some money mondays we will see you
22:38
all next
22:39
monday at 3 30 central

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