Long Distance Property Owner- Augusta, Georgia

BRRRR - Buy, Rehab, Rent, Refinance, Repeat
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Long Distance Property Owner- Augusta, Georgia

Hope Hendricks
Member since 2023 路 13 posts 路 5 votes

Hello BP,

I was hoping to get a little feedback on my current situation. I purchased a home outright to use a rental property in Georgia a few years back for $30k that鈥檚 is currently valued around $100k but I live in South Florida. I hired a contractor who pretty much burned me and the money I used was my own capital. I was able to get the roof, electrical, and an open floor plan completed but the contractor was very unreliable. Literally dragged his feet.
I want to keep the property since I don鈥檛 carry a mortgage but a part of me just wants to sell it.

1. What creative ways did any of you use to fund your home rehab projects without using your own capital?

2. For long-distance property owners, how were you able to ensure your projects were completed?

3. Would you continue with rehab or just sell?

4. Is being burned by a contractor simply a rite of passage in this business 馃槶馃ぃ

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Kerry Noble JrPro Member
Investor 路 Indianapolis, IN 路 Member since 2018 路 2k+ posts 路 1k+ votes
3y

maybe see if you can get a HELOC on it. Use that line of credit to fund other ventures. also, find boots on the ground that can verify the work before you pay the contractor.......thats apart of my business model actually

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  • Kerry Noble JrPro Member
    Investor 路 Indianapolis, IN 路 Member since 2018 路 2k+ posts 路 1k+ votes
    3y

    maybe see if you can get a HELOC on it. Use that line of credit to fund other ventures. also, find boots on the ground that can verify the work before you pay the contractor.......thats apart of my business model actually

    1Reply
  • Todd Heitner
    Specialist 路 Huntingdon, PA 路 Member since 2014 路 160 posts 路 59 votes
    3y

    Hey @Hope Hendricks, great post thanks for sharing. So sorry to hear you got burned by your contractor, as you say it does seem to be a problem everyone faces. I recently shared this thread with our team which highlights that finding good contractors is a problem that all investors face...https://www.biggerpockets.com/...

    1Reply
  • Phil Moore
    Rental Property Investor 路 Oak Harbor, WA 路 Member since 2022 路 29 posts 路 18 votes
    3y

    As an out of state investor myself, I can attest to the difficulty of finding good contractors who are able to perform when you don't necessarily have eyes on everyday. To echo Kerry's point, it is absolutely invaluable to have boots on the ground to oversee a project. It could be literally anyone you trust to just look at it and ask questions. 

    I find that at a minimum if you don't have boots on the ground, you need to set the standard early on for what it is you're looking for and when you want it to be done. Set-up payment gates to get that work done when you want it, and have them send you photos of their work to verify. It's always easier to back off in the future than it is implement this kind of rigorous attention to detail late in the process.

    To address your point about capital, I would suggest looking into companies that offer personal lines of credit. While not ideal, these LOCs will allow you to get the work done on-time and on-budget when you don't have to interrupt work to find the money.

    Once your rehab is done, the major headache will be out of the way and it'll be back to business as usual. Keep at it; you'll get back out what you put in and then some.

    1Reply
  • Greg SchrefflerPro Member
    New to Real Estate 路 Atlanta & O.O.S. 路 Member since 2022 路 64 posts 路 31 votes
    3y

    Hey Hope,

    I hope you had a great Christmas and are having a Happy New Year!

    I don't know if you've heard of David Green's 'Core Four', but it's definitely something you'll want to seek more info on if you continue to invest out of state. His book 'Long Distance Real Estate Investing' is worth checking out. Anyway, the four core are 1)Deal Finder (probably agent) 2) Property Manager 3) Contractor 4) Lender. Here's a link right here on BP you can check out:

    https://www.biggerpockets.com/...

    1Reply
  • Steven Goldman
    Lender 路 PA 路 Member since 2019 路 533 posts 路 461 votes
    3y

    In order to successfully navigate out of state investing it is essential you build a team as Greg Schreffler  suggested. Georgia is a growing State and many of our borrowers are working in the greater Atlanta metro area. In order to be successful they formed a team with a agent or wholesaler, broker or lender and a property manager or contractor.  Most of our clients use rehab lenders so that they are not putting all of their money at risk at time of acquisition.

    I think the trickiest part of out of state property management is the construction piece. Contractors come and go so you must stay on top of the construction leg of your team to ensure you do not get burned in the rehab. process. A rehab lender requires draws and inspections so it makes it harder for the contractor to act unethically. Bigger pockets has a great book on rehabbing. J Scott on Estimating Rehab costs. We wish you luck, keep moving forward. 

    0Reply
  • Drew SygitBusiness Member
    Property Manager 路 Royal Oak, MI 路 Member since 2012 路 12k+ posts 路 9k+ votes
    3y

    1) do a cashout refinance

    2) don't pay upfront and only pay once you have a 3rd party verify work is done and quality acceptable

    3) You'll take a bath if sell unfinished

    4) only if you learn your lesson

    [email protected]248-209-6824
    Logical Property Management4.9451 Reviews
    WebsiteView Page
    1Reply
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