Wednesdays: Zoom In and Level Up!
Some are driving, some walking, some sitting in their office, some lounging at home, some eating lunch, some are even painting or fixing – yet they’re ALL in the same place at the same time… on the Wednesday Mentorship Zoom call!
Every Wednesday at 12:00 noon, people from all over the greater St. Louis area tap or click to join the discussion of all things Flip, BRRRR, and beyond! (This service is provided to all approved borrowers of FasterFunds Lending)
Hosted by FasterFunds Lending, the Wednesday Mentorship call is attended by seasoned experts, first-time rehabbers, and people at all levels in between. The call is open exclusively to our approved borrowers.
In this friendly, relaxed atmosphere, participants ask questions, share their wins or struggles, and give and receive useful knowledge and advice that quickly moves everyone up a level in their thinking and in their real estate game.
Bryan is there each week to add his wisdom and to periodically update everyone on the latest market changes as they happen. He’s an expert on how to shift your investment strategy to get the most out of any type of market.
Suzanne appreciates a well-done project, and during the call she’s great at highlighting the key things that can help you get the most profit out of your deal. She offers excellent advice on how to handle unexpected issues or sticky situations that come up during your project.
Speaking of well-done projects, the zoom call regularly features a before-and-after case study. The case is presented by one of our borrower clients who has done an exceptional job on a project they recently completed. There is always something new and surprising to learn!
For example, in August, Jack and Mike Ehlers joined us on the Wednesday mentorship zoom call to present their case study on rehabbing a four-family flat. We had no idea that this project was part of a phenomenal real estate investment strategy the brothers have developed over just a few years, beginning with just a walk-through and a hard money loan from FasterFunds Lending.
Mike and Jack’s rehabs are all multi-family, with the smallest being four-family buildings. They gut all the units and fix them up, lease them to tenants, and then sell them, usually to someone on their buyers list of 30-40 regulars. On the Zoom call they talked about their recent four-family project on Pennsylvania Avenue in the City of St. Louis.
Right from the start, attendees on the call gained this valuable insiders’ tip when buying properties in the city: if you are looking at a building, be sure to find out with certainty whether the electric service has been on within the prior six months. If the electric has been on within that window of time, you’re good to go. If it hasn’t, you will be required to have an electrical inspection by the City of St. Louis. They will condemn old knob-and-tube wiring and require you to bring all of the electrical up to code, at great unexpected expense. For example, it cost Mike and Jack $35,000 to rewire the four-family building in Pennsylvania!
Even with the total electrical overhaul, the project was finished in about four months. The Ehlers’ try to do four or five of these projects a year, and they get them done fast. They pay their contractors well, to encourage them to tolerate working simultaneously with other contractors to save time.
Because the buyers on their list are confident of the quality Mike and Jack put in, the properties hardly ever need to be listed. Even when they do, they’re usually sold within 48 hours. The Ehlers’ have built a nationwide buyers’ pool by simply reaching out occasionally to a local real estate agent that deals with investors. They usually only need to work with a real estate agent once, and then the buyers will hit up Jack and Mike again and again to see if they have anything for sale.
They keep prospective buyers even more motivated by educating them on tax credits they can pass along to their prospective buyers including bonus depreciation and cost segregation. They make it easy to claim these forms of depreciation by maintaining a detailed spreadsheet of expenditures and cash-flow related numbers for each building. In fact, Jack and Mike are fanatical about tracking numbers.
The brothers also shared an easy way to get $100 more per unit in rent to make their investment properties even more appealing to buyers. They simply put a washer and dryer into each unit. While this pays for itself in just a few months, the extra rent it generates is collected for years to come.
With the profits from these rehab projects, Jack and Mike buy land for new construction of multifamily townhomes and condos in the outskirts of the St. Louis area! They use the same crews for the new construction as for the rehabs. When these contractors are kept busy and are making a ton of money, they don’t usually mind working over each other on a project.
For the new construction projects, Mike uses specialized knowledge from his background in HUD multi-family lending, specifically as an underwriter of large apartment deals. The brothers build four, 3 bed-2 bath townhomes under one roof, with garages. By acting as their own general contractors and using the same architectural designs and finishes over and over, the cost savings are huge, and the profits are sensational.
Small local banks like First State Community Bank, Sullivan Bank, United Bank of Union, and St. John’s Bank have proven tremendously helpful for financing and refinancing. With 10% down on the land, the banks will finance 100% of the new construction. As soon as just one of the four-plex units is finished, Mike and Jack start renting. The banks are very happy with the whole program.
“Honestly, this all started with FasterFunds [Lending],” Mike recalls. “We’ve worked with other hard money lenders, but you guys are by far the best! It’s a huge team effort, and you want us to succeed as much as we want to succeed. Suzanne helped us get our first house on Devonshire, and from then on it was love at first sight with real estate investing.”
Jack adds, “Everything is a moment in time with these projects…. Just keep putting one foot in front of the other, and be honest and up front with the lender when things go sideways. Other than that, the only thing that limits you in this business is your mindset. If you have an abundance mindset, you can crush it.”
Join us each week at 12:00 noon for the Wednesday Mentorship Zoom Call. Get to know the people at FasterFunds Lending and learn from the experiences of other rehabbers. Drive, walk, eat, sit, stand, paint, relax– but above all, zoom in to level up fast!