All Forum Posts by: Joseph Hummel

@Rhett Stephen Lowe

Sorry not a lender but few questions.

What’s the arv of the home as built to plans?

You might be able to use a lender that specializes in that, but they will need milestones complete before releasing funds and all other checkboxes complete.

I think currently finance America offers 85%LTC/70%LTV construction, so if you already have that amount of equity you might be able to move forward right away.

@Johnny L.

Hi Johnny- congrats on your future building.

As a GC I understand what it takes to take a project from dirt to done. You can imagine from all the work you already put in as the owner... is nothing compared to what the GC has to do just to put together a bid, it takes months to get an accurate bid...and that’s if you already have plans and engineering, not to mention a schedule of finishes already chosen (every color,detail,handle,tile etc). So when you ask a GC to bid that- keep in mind he would be risking losing months of their time- not a fun prospect, and if you find someone super excited to jump on it, it may be because they are not busy because they are either new or not reputable and you won’t get anything accurate, expect multiple change orders for “unexpected” items. And if you’re choosing someone based on bids you’re doing it wrong. Find a GC with a good reputation and cut him in on your deal. Do they have a crew and subs needed to complete? Labor in trades is short and prices are inflated now. We’ve built many $million+ spec homes and always get equity because it’s a higher risk- and margins are already tight. Cost to build and sales price are getting very close depending where you’re located.

@Alex Jamael

As a builder I would say Exterior stairs made of solid wood should not be painted. Although the climate is dry paint and wood can create dry rot and upkeep as you stated is a pain. Get a long lasting stain and yes reapply as directed.

For waterproofing tile or stone is only as good as it’s underlayment makeup. I have waterproofed exterior stairs, decks and roofs/balconies over living space where it has to be perfect. Get a good coatings company, a good tile company or hire a GC.

I have put in dozens of stairs, decks like this but there isn’t just one way to do anything.

@Michael S. Helton

As a builder I agree. Reno is a hot market and growing rapidly. This is great but expect to pay a little more and wait a little longer.

@Bradley Cladianos

Investing off mls deals is not really a great deal finding strategy, I mean it does happen but you reallllllllly need to know your market but you make your money when you buy, and if you buy at retail it’s going to affect your immediate cashflow and appreciation. If this is more of a wait and see then maybe your idea of a duplex or house with a separate unit to rent out or 2 houses in 1 lot (which is common in Reno).

Best wishes

@Pamela Surjadjaja

Congrats on making the leap. I think everyone would agree run your numbers. Some people use short term rentals as a strategy, so it is up to you to determine will it help you achieve your goal. Will it book up fast enough? Is turnover expensive or a headache? Is cashflow reliable? Do you get the same tax advantages? Are their local government regulations that you need to consider?

Every market has a strategy that works. Reno is a hot hot market right now. Find one that works for you and your numbers and move fast!

I have a tenant (a non-profit business) who hosts a huge summer event here, and they are suppose to move into our place in June. This is the 3rd year we worked with them, and they are great tenants. They signed and prepaid their 3 mos lease back in January before covid, in March we bought another house and use the other just as a rental. We opened a discussion about a month ago in case their event was impacted with covid. 

I want to do the right thing so I just need some ideas of how I can make this a win-win. We can't pay back their lease in a full.

1. Am I required to refund their lease payment if they decide not to move in? (the lease states no refund of rents)

2. doesn't PPP and SBA loans cover this loss for them if they apply and receive it?

I could rent it to someone else if they don't move in, I could pay them some of it back from my cashflow, but even if we paid$1000/mo for the next year would barely be able to pay it all back. We could apply the lease toward next years stay (hoping this option works). 

Anyone else have any ideas?

Hello BP friends!

I started this journey when I was 21. It makes me sad looking back, because this journey sucked. Very little income, no credit, lacked motivation and a definitely only had a 1st world perspective of the world. I was too smart for my own good, and so I had no desire big enough and for a short while ended up homeless all while working in and trying to learn real estate and mortgages at the beginning of the big recession. Why? Well I listened to Rich Dad Poor Dad, and read every book he wrote and felt convinced that if I worked for free or very little as long as I learned something valuable and gained a skill it could pay off. All the while I trashed my credit, I was definitely over prideful and stupid and it took me many years to get that fixed (still working on the stupid). I could've easily taken any job and been better off, I mean any job. The turning point was looking in the fridge and not having money to buy food, my cars gas tank was empty and I was 2 months behind on rent. I gave up on real estate, moved away (sucked it up and moved back in with family) and started trying to rebuild and figure out life at age 29. This might be normal now with millenials and all, but I was seriously embarrassed. With my tail between my legs everyone I knew, knew I failed and I had all the scars to prove it.

I never want to be broke again, I never want my family or loved ones to experience that, on a grand scale - it sucks. So I've been putting in years, the reading, the mindset shifting paradigm enabling... time and effort to get into a position where I can really do something about it. I'm not in my 20s and can't eat subway sandwiches everyday (yuck)... but I do understand mortgage financing, and credit- I've taught both and was trained by underwriters (yes back when I was supremely broke). My credit used to be (if I remember right) a 436... let that sink in. Nobody would even lend me a dime. I slept on couches of people who were coke heads and rich and I couldn't even get a cellphone provider. Life isn't fair, but it does equalize in some ways. My mindset had to change for any of this to be worth it.

Fast forward, 11 years later, I'm now 38, and married 4 years. My wife and I live in an insanely beautiful area in Lake Tahoe. I used to be an office guy, a tech-guy, and thought I was too smart for manual labor... well when life has a lesson to teach, wake up!... I've been doing manual labor since the end of the recession and building/remodeling since, and honestly nothing compares to the satisfaction you can get from building something new or remodeling something ugly and broken. And it helps you get off your butt and build some muscle too :) Ancient King Solomon who was arguably the wealthiest man who ever lived wrote how sad it was that man should work hard and hand over his work to someone else who didn't work for it, and he stated that ultimately you should enjoy life, and find enjoyment in your work, whatever that work is Eccl 8:24.

I've physically built and remodeled $50 million worth of real estate in the last 10 years. I don't own the company I work for, but I treat it as if I did. My credit now varies around 720-800+. About 6 months ago, I started earnestly and seriously looking at RE investing, I was refinancing our home and my plan was to pull out a HELOC. We bought our home from an older lady who lived in it 30 years, it was in bad bad shape (cha-ching) Remodeled it and years later it appraised for nearly double what we paid. This wasn't by accident, we waited and waited for 2 years we waited and when we saw the right property we jumped on it. Currently we are in the process of purchasing our 1st buy/hold property in pretty good area of Detroit. Also, trying to secure a $750k credit line for investing. I've never been to Detroit - I know nobody from there, except a few people I've met on here and some businesses I've called, but I love the city its woes and history and all.

If anyone has good connections there - we should close in about 30 days or less. It an all cash deal. Rents are about 1000-1300/mo in this area and looking at about 100 other properties.

Sorry for the rambling on, but in case I ever make it to the BP podcast, I wanted to have this written down because Alzheimer's is real :)

I'm jealous at the prospect - I love prague and my first visit I wanted to buy a place. We are coming back for our 3rd visit in June 2020. What about hard money lenders? Is that an option? Are the properties you are looking at in great condition? Do they have a value add option so you can you BRRRR them, or is that not possible in Prague? Would love to hear more.