All Forum Posts by: Aaron Junck

Is it on your property or the builders?

If its on your property and you don't have any pictures prior it will be hard to get the builder to pay for it even if everyone knows he damaged it.

If its on his property and he doesn't want to fix it then he doesn't have to , however if it does fall one day on someone odds are someone will be getting sued .i.e. the new owners . So maybe if you see them around you may want to mention it to them . They could tell the builder to fix it or they won't close. Odds are the builder would then fix it.

I think what @Dawn Anastasi is trying to say is that if they dont have a track record of real estate rental income on 2 years tax returns that they will have to qualify based on their income alone. Some banks will allow you some potential rental income such as 75% and thats with a signed rental agreement. My understanding is though that you need to have some track record in order to use it unless its a larger property.

Why couldn't you just charge a finders fee?

@Chukwudi Motanya your lucky to be starting so young. IMO if you need $2000 a month to live on at the young age of 23 I would recommend building enough passive income of twice what you need in todays value. So in 7 years, I personally would feel more comfortable with $4000 a month in todays money(not adjusted for inflation). The reason for this is you will need to account for expenses that you currently dont have... ie any benefits your employer contributes (health insurance). Also life happens.. you may get married and have kids and the whole 9 yards and if you live below your means your good to go but its always nice to have that cushion. Just my 2 cents.

Keep rolling over your profits from each property if your going to do flips and that will help you build up wealth and try to buy under retail is a huge wealth builder.

I have always liked to write down your end goal and then work backwards.

As far as having 20 properties keep in mind your going to have to get creative with financing as banks are harder to deal with the more properties have.

Educate your self on here as much as you can so you have many tools in your toolbox and can do as many profitable deals as you can. I think your plan in 7 years is very possible . Go get em!

@Joshua Dorkin .. Are you still planning on this in the spring? :) Getting a little excited .

haha thats hilarious!

If they are asking $160k for the house, if an appraisal is done what will it come in at ?? $160k? if so you are paying retail. Ideally if this is a "fixer upper" or like you say work needs to be done to get it to where you want to be you shouldn't be paying retail. If it would be valued at say $180k then you could pay$180k for the house and have them sell you the land for 10k or 15k cash that would get you a a good deal and they would be done with both properties. There is no need to pay retail. If they are trying to get 205k your not too far off anyways at 195. I would actually try offering them less for the land. This really only works if the house can support them both, otherwise you have to be more creative. At the end of the day you will get ALOT farther dealing with the bank if you own nothing on the land.

If you haven't done a 1031 Exchange before make sure you contact someone locally that has so they can handle the process for you so you don't mess it up and get hit with taxes right now. That would defeat the purpose lol. Im not 100% sure but I dont believe you can use the funds to fix up the house I think you have to use them to purchase the property and use your own cash to do the fixing up. Im sure others can chime in on this, as I have only read up on 1031 exchanges , since I too plan on doing one here shortly.

Does the house value support both the extra lot and the house?? or are you paying retail? What I am getting at is if you can buy it as a package from the seller pay the full price for the house and then have them sell you the land for $100. then you have a clear title to the land and no attachment to the house. When you decide to go build on it down the road it will be much easier. Also depending on the lending institution you use for financing the construction loan they will require typically 20% in the deal from your end and if you have the land in your ownership for 12 months few will do 6 months then you can use that.

IMO I say no cash is king . And if you have no cash that limits your options.

It sounds to me he may be too small to handle larger projects...

It sucks to have to check reference for someone you are already using bc they feel they have proven themselves already , but I would ask for some referrals of homes he actually built and call those people to see how it turned out...

If you are paying cash to do this I don't see why you couldn't keep doing the way you were, however he may be sayin he doesn't want to wait for a construction draw to go through if you are getting a loan.

Who is the general contractor here? You or him?

It sounds like you , therefore , I would lean away from paying upfront money. You can get the building materials paid for on your end. If he can't support paying his workers a paycheck or two on his own I personally question how he operates his business. You shouldn't be his banker it's not your responsibility .