All Forum Posts by: Will Barnard

"Anyone have a PRICE/SQFT. guideline that they currently using to accurately estimate their rehabs??"

The problem with the above is that you can't "accurately" estimate rehab costs by using a price per SF. If you want accuracy, there are no shortcuts, you must make a SOW (scope of work) and price each line item out to be accurate allowing for a % for buffer at the end as hidden or unforeseen items are not only common, but probably, especially when the rehab is heavier vs lighter.

Lots of people suggest having 3 bids from contractors but when you don't own the property and are merely trying to put a budget together to make an offer, contractors are often not going to put forth all that time in effort on the off chance you do get the deal and do hire them, so you would have to pay for the bids. That would not be efficient at all and as such, knowing how to price out a rehab on your own is essential to your success as a real estate investor working with rehabs (for flips or holds). There are many, many threads here on BP on how to properly estimate rehab costs in which I and other pros have gone into great detail on how to perform this task. 

Never heard of a condo without an HOA, they have shared public space, typically shared walls and/or shared roofs, etc. so it would require an HOA. As for pricing, as with any deal, you need to perform your due diligence on the specific property, community and area. I too skip over condos as dealing with the city is difficult enough, adding in an HOA and their management company adds yet another layer of possible hurdles and delays which negatively impacts profit margins. You also have to contend with (often times) tighter work spaces, lack of staging areas, neighbors with shared walls, etc. On top of that, in an uptick in the market, condos typically appreciate slower and in a downturn, faster than your single family homes adding yet another hurdle to profits. This is just my opinion and experience with condos which is why I avoid them personally as investments.

So long as the actual owner (person or persons) of the trust is the same as the LLC, then you would not affect your property taxes on such transfer. Same goes from personal name into an LLC.

JD is correct, bedrooms must have an egress window or door. To qualify for that, the window must have a specific minimum size opening and minimum distance from finished floor. Check your local building codes for specifics.

If you don’t know what you are doing, then yes, for sure, of course cost should be a factor in your decision too. The cost of doing it yourself and taking longer is also a cost (your holding costs and opportunity loss).

As I stated in your other post (you should have just asked all these questions in one post, would have been easier), $40k for just architectural design on a 1000sf 2 story ADU without complexities should not even be half that much, find another architect and find another structural engineer. Both services should be $20k or less.

I personally have never had any architect or structural engineer bid any of my projects or that of my clients based on a percentage of the construction, it is always based on time which is subject to complexity. For a 2 story ADU, your architectural and structural combined should not be more than $20k for simple design that is not hillside or anything complicated. If they want to charge you $15k- $20k for just structural, find another.

The window AC unit has to go and the two different front doors is not the best look either. Aside from that, forming a separation between the two units in the front yard (via small fence, rock/gravel strip, or small planter) as well as adding a lawn and hardscape walkway to each front door would help a lot. Adding trees, colorful plants and flowers are always a great idea. Depending on your weather, choose those that can handle your weather patterns.

Based on your numbers provided, you should sell now at $600k and walk away with a tiny profit or break even. Even if you take a small loss, that could be better than a greater loss down the road, especially when you factor in opportunity loss. If the unit can cash flow annually with what you have in it now, but you cant qualify on your own for the conventional financing refi, then bring in a financing partner for a share in the cash flow/ future equity.

There is no boiler plate answer for this as every partnership and every situation is different as are the needs and goals of each partnership. So the question goes back to you.

If you are looking for growth in your business, then the more you re-invest and the less you take out, the faster you can grow. The more profit you take out, the slower the growth without borrowing and borrowing equates to more debt which equates to more cost/less profit and more risk.