A JV Rehab with another BiggerPockets Member - A Success Story!

A JV Rehab with another BiggerPockets Member - A Success Story!

Investor · Atlanta, GA · Member since 2014 · 415 posts · 299 votes

A BP friendship with @Tom Yung this past summer led to a JV to rehab an Atlanta property Mr. Yung had picked up in a Dekalb County tax foreclosure. The house is located in east Atlanta in the Edgewood neighborhood and was vacant for over a year while the statutory barment process was completed and was vandalized and used as a crack house and a place for homeless to crash. A downside to picking up tax foreclosures is the inability to go inside the house to inspect. The cost to pick up the house, attorney fees, etc was approximately $70,000 and I'm not sure either one of us would've made the investment if we'd seen the inside first! More numbers and after pictures will follow, but I think you'll agree that this one is a doozy!

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Engineering Consultant, Investor · Seattle, WA · Member since 2013 · 213 posts · 61 votes
11y

@David Begley Congratulations! The after pics look fantastic! 

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  • Investor · Atlanta, GA · Member since 2014 · 415 posts · 299 votes
    11y

    I give up!  I'm not able to post pictures.  What's the trick?  

  • Round Rock, TX · Member since 2013 · 21 posts · 5 votes
    11y

    I saw your before and after pics on the flickr link. The after looks amazing! Great job. Share more details on the numbers.

  • Investor · Atlanta, GA · Member since 2014 · 415 posts · 299 votes
    11y

    Before Pics:  https://www.flickr.com/photos/21483092@N05/sets/72...

    After Pics:    https://www.flickr.com/photos/21483092@N05/sets/72...

    Bought for approximately $70,000; spent $80,000 in rehab expenses; listed for $245,000 and had a contract for full price the second day listed!  Net profit of approximately $73,000 after realtor fees/closings costs.   

  • Engineering Consultant, Investor · Seattle, WA · Member since 2013 · 213 posts · 61 votes
    11y

    @David Begley Congratulations! The after pics look fantastic! 

  • Investor · Ringgold, GA · Member since 2014 · 86 posts · 13 votes
    11y

    @David Begley nice job, looks awesome.

  • Real Estate Investor · Prince Geroge's County, MD · Member since 2012 · 392 posts · 104 votes
    11y

    Looks great! 

  • Real Estate Investor · Scottsdale, AZ · Member since 2014 · 16 posts · 8 votes
    11y

    That looks great David and a full list offer on day 2?!!! Can we say Cinderella story.  Great job.

  • Investor · Atlanta, GA · Member since 2014 · 415 posts · 299 votes
    11y

    @Vincent Lewis Thanks!  Of course, now I think I underpriced the listing.... , lol 

  • Realtor · Kansas City, MO · Member since 2012 · 25 posts · 4 votes
    11y

    Congratulations

  • Jasen BanksonPro Member
    Investor · Seneca, SC · Member since 2014 · 16 posts · 2 votes
    11y

    Wow!  Great job!  Looks like it was quite the project, but came together nicely!

  • Homeowner · Cleveland, OH · Member since 2015 · 17 posts · 5 votes
    11y

    Great job!  Congratulations!!

  • Grayson, GA · Member since 2013 · 30 posts · 3 votes
    11y

    Amazing work, congrats!

  • Investor · Atlanta, GA · Member since 2014 · 415 posts · 299 votes
    11y

    @Neha Wadhwani @Yinan Q. @Brent Fleeman  Thank you, this one was challenging!

  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    11y

    @David Begley 

      Nicely done.. sorry I missed you last trip to 'Atlanta... Its great to see such a vibrant city bouncing back.

  • Greenwood, IN · Member since 2015 · 6 posts · 1 vote
    11y

    Looks amazing!  How long did it take to turn around?

  • Investor · Atlanta, GA · Member since 2014 · 415 posts · 299 votes
    11y

    @Jay Hinrichs Thanks Jay, hopefully we can connect the next time you are in the southeast.  

    @Scott Young  The rehab began October 1 and we had a target December 1 completion date that turned into a mid-January due to a few unforeseen delays - permitting and inspections primarily and a few that I should've foreseen and didn't, but hopefully learned some lessons.  Even though the house is only about 1,600SF, the demo took longer than anticipated because of the extent of the vandalism.  We went through 6 of the 40 cubic yard dumpsters and also had to replace the roof, which wasn't in the original budget.   

  • Investor · Yokosuka, Japan · Member since 2014 · 631 posts · 184 votes
    11y

    Fabulous!

    The after is great but having the before pictures makes it magical. I've seen Tom's magic before. You made a wonderful improvement to that house and neighborhood! Congratulations to you both!

  • House Flipper · East Stroudsburg, PA · Member since 2013 · 1k+ posts · 205 votes
    11y

    Nice work,  good thing you didn't get inside or you may have had a lost opportunity.  Good job and nice work.  Keep us  posted on the end process.  Good luck and success with a continued relationship.

  • Investor · Atlanta, GA · Member since 2014 · 415 posts · 299 votes
    11y

    @Pyrrha Rivers  Thank you, and yes, @Tom Yung is the perfect partner for a JV - extremely knowledgeable and patient with his Jr. partner!

    Also, for those that post Forum questions regarding "how to structure a JV", I'll let you know how we handled it - not saying the best or only way, but this arrangement worked for us. We formed a Georgia LLC (the two members are our "parent" LLCs) that outlined each of our responsibilities, contributions, splits, etc in the Operating Agreement and also transferred the property to the LLC ownership. The Operating Agreement included a Dissolution Statement stating that the LLC would be dissolved and assets/liabilities settled upon the sale of the property. Further, we opened a bank account in the LLC name (have to procure an EIN), made equal payments into the account and paid all rehab and carry costs through this account.

    @John Moore Thank you, and I'll provide an update after we close.

  • Investor · Yokosuka, Japan · Member since 2014 · 631 posts · 184 votes
    11y

    @David Begley Thank you for sharing how you structured your JV. As you mentioned, I know it's not the only way, but I think knowing all the steps you took will positively impact newbies to consider JV more partnerships as a possibility knowing this is ONE effective way to go about it. I wonder what structures others have used? and yes, @Tom Yung is  very generous sharing his knowledge, patient and kind. Not to mention a great teacher. Good on you to work with him!

  • Investor · Atlanta, GA · Member since 2014 · 415 posts · 299 votes
    11y

    @Jasen Bankson @Art Pulphus @Jeff Hunt  Thanks for the positive feedback guys! 

  • Investor · New York City, NY · Member since 2014 · 370 posts · 85 votes
    11y

    Nice job on the rehab. I can't believe it is the same place. How much was the tax lien? Was there a mortgage that was wiped out? These situations always make me wonder what was going through people's heads.

  • Toronto, Ontario · Member since 2014 · 615 posts · 172 votes
    11y

    Awesome! couldn't have been handled any better!

    Congratulations @Tom Yung and @David Begley 

  • Investor · Atlanta, GA · Member since 2014 · 415 posts · 299 votes
    11y
    Originally posted by @Ndy Onyido:

    Awesome! couldn't have been handled any better!

    Congratulations @Tom Yung and @David Begley 

     Thank you. 

  • Real Estate Agent · Southington, CT · Member since 2008 · 5k+ posts · 3k+ votes
    11y

    Congrats @David Begley. Did you and your BP partner connect through the marketplace?  A BP networking event?  A colleague request?

    I have met and had the pleasure to work with and meet several people from BP, always curious to hear how people in other market are making their BP connections.

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