All Forum Posts by: Kenneth Bell

Sorry I have not posted in a while just been super busy!!! We are dried in, Plumbing rough is done, sheathing inspection passed on to siding and exterior paint, HVAC done by Friday. House 2 comes out of the ground next Tuesday!!! House 3 in 2 weeks!!!!

@Matt Huneycutt 

What are you trying to accomplish?? If executed properly I think either scenario might work. I dont know the area where these properties are but if the demand is there for rentals then that should work to build and hold or sell them. 

I would be wary of counting on the direction of future zoning. If an overlay already allows a higher density then great but counting on it coming and basing valuations on that could be costly. Been there and done that and have the bruises to prove it.

Manufactured homes depreciate and do so quickly, they are disposable housing to most banks. As far as loans for building spec......even with great experieince banks are a bit shy about them. There are smaller community banks that offer construction loans for specs but after construction you will need to convert.

As far as mortgaging the dirt, I would use cash if you can becasue if not you will have to refinance or kill the debt to split the lots.  There are numerous possible pitfalls- make sure you understand the zoning for the property inside and out. The property you say requires a lot size of 22,000 square feet is there a street frontage requirement? Be sure there are no easements that would affect your ability to build as well.

Your split with your partner should hinge on what you each bring to the table.

My exit strategy is always very simple a little money and low or no risk is better than a lot of risk and a lot of money. If you are unsure about the project and you can turn it and make a quick $20-30k splitting the lots and selling them and sell the house as well. I would take it an move to the next deal.  From what is sounds like the funding strategy 3 specs could be an issue. I would have all my ducks in a row from funding to build cost, rent rates etc before I woud proceed.

That all depends on the zoning for the lot. You need to look at the setbacks and other details and it will help you calculate a footprint of what you can build.

I honestly work with realtors that do all of this, from Facebook to twitter to whatever else. I try to make sure we have a product that stands out in the market. I am also not easy on realtors we usually do a nightime brokers only open house that I have good food, wine and cocktails. Brokers don't often miss free food and drinks. I will say also that the markets I am in are usually sought after(or i would not be building spec there anyway) so traffic has not been a problem. I leave the marketing to the marketing people....If Ihave to think about getting more traffic then I have built the wrong house or have the wrong realtor!!

@Karen Margrave 

Karen, we most often use hardwoods. About 5 inch is the lagest we go.  I have never used laminate it just usually does not fit with the price point we are marketing. I have looked at engineered but in my are it is still considered a step down even if it cost more. I like to move to where the market is going and thus far it has not moved in that directon for us where other things have changed a lot. Like busy granite is out in my market, it is either quartz or carrera or less busy patterns.  A few years ago the more crazy the granite looked the better. I laugh when I see what was hot just 4 years ago. If engineered flooring gains traction here I will "give the people what they want"

@Colin Perry @Karen Margrave 

Karen is correct  I was not clear. What I meant is that if the builders screws up and is not able to finish the bank will take your land unless you come up with the money to complete the project so it can be sold. You could in some cases go after the builders bond which is required in NC but this is difficult and expensive. I am not saying partnering is bad I in fact do it with builders all the time. But if this is not something you are going to do over and over I would find a builder that will build on a cost plus basis.

@Colin Perry 

Colin, what exactly are you trying to accomplish? Build and sell a spec or JV with a builder for the experience?

If you just want to build a spec to sell it then I would suggest find a plan and get your own funding interview some contractors and build and sell it yourself. However if you are trying to learn the ropes to repeat this process then maybe partner. 

Think about this..If a builder gets a first position loan against your property and screws up they take your land. If you get the loan and he screws up.. you fire him and get another contractor. Unless you gain advantage of experience(that you plan to use again) or $$$ from the partnership I would steer clear. I would keep as much control as possible. If you partner, besides all the important things that @Karen Margrave mentioned above, make sure you have an operating agreement that keeps you in control just in case things go sideways..

My sister is in Chapel Hill and my mom in a Durham suburb I dont know a lot about Raleigh but I am sure there are some great spec areas.

@Dustin Morgan 

Here is a link for the post I began when I started my first raise ever.

http://www.biggerpockets.com/forums/520/topics/131...

At the time I had never used crowdfunding and knew nothing about it. With the help and direction of some crowdfuning and development pros @Bryan Hancock  I dove in and worked on my first offering.  With some solid advice from Bryan and working with Ifunding I completed my first raise. When I started on this journey I asked for a playbook.....no one answered that question but I was given some sound advice and I will pass it on. Call your own play!, no one can give you the road map because each deal is different.

@dustin

I also did a thread on the whole process. I am on my mobile so it is not so easy to share the link but I will post it. It will answer a lot of those questions

@ Dustin,

This is a common question that I have answered in this thread I believe..... You can also go on ifunding and see the terms. You can chose to raise equity or debt and I have done both.