All Forum Posts by: Will Barnard

There are a ton of do's and don'ts, many of which have been posted in BP threads here. Minimizing the headaches of flipping is no easy task, especially for someone with no experience so expect headaches and problems. If you think you can minimize most of them, you will be disappointed so expect them and learn to deal with them, it is part of the business.

Building a good team of contractors, sub contractors, and project manager (which can be you) is crucial. The biggest mistakes are typically at purchase - over paying or missing large rehab items needed. Other large mistakes (also done at purchase) is buying a property with a major negative to it. That could be no garage (when all the other homes on the street have one), backing up to or on a busy main street, bordering or in ear shot of active railroad tracks, in airport flight paths, or where the subject property sits next to or across from a trashed house. There are many other negatives too, this is just to name a few of the main ones.

 With partnerships, that is one more reason to get an entity. The entity docs should include an operating agreement or partnership agreement which spells out all the details of who is responsible for what and what happens if A happens or if B happens. It is also helpful in that you have an entity bank account and all monies go in and out of that account. Run it like a business, not a hobby when dealing with partners. If you are just the money guy and the partner does all the other tasks, then you can do the above advice OR simply be a lender and do a deed of trust and note against the property as the lender for your protection.

Pricing (both materials and labor) have dramatically increased since 2019 so that is the largest reason for your error in pricing.

I was not very handy when I started either but I learned as I went along. One of the most important things in flipping is not necessarily knowing how to swing the hammer, but how much it should cost and how long it should take. If you know that, you will be ok. Knowing the basic lingo will also help when communicating with sub contractors and other service providers.

Lastly, building a quality team of people is of vital importance. Start educating yourself (here on BP is step one, step two is attending RE meetups, and during all of that, spending time learning your market is essential). Then you will be ready to go do it in the real world.

Michele, Your deposit is not really that large at $1500 and half is $750. Since you agree to $200 of it already being deducted, the difference you now have is only $550. For that amount, it is likely not worth going the legal route as that is wasted time and negative energy on your part. I suggest you simply stick to a letter stating the law, timelines, and the fact that the inspections which should have been done by the landlord and given to you were not done in compliance with CA law. This certified letter to landlord should get him to move his position. You could also include at the end your intent of posting negative reviews regarding your exit experience, this too could add to your position to get him to be more fair. 

If that does not work, you might be better off walking away with the 1/2 he is proposing if he does not budge. Sad, but likely not worth any more of your time. Use your time moving forward with positive things.

Michele, CA law is clear on this. The landlord should have completed and provided to you in writing an initial walkthrough of the unit siting each deficient item. Upon your lease ending, the landlord is responsible for doing the exit walkthrough and siting any deficient items in which your deposit would be reduced and providing you the tenant the option and ability to cure those items prior to departure. If none of that was done, he or she has NO legal leg to stand on. Additionally, the timeframes you mentioned which were not met are one more legal issue on your side. 
in this case, I would not settle, I would send him a certified letter citing these issues and demanding your full deposit back or face legal consequences. The law in CA is quite clear on this. 

Yes, legal representation can be expensive, but in cases like this, your claim can and should include court costs and attorney fees and that would be more expensive to the landlord than simply returning your full deposit. I think you have a good hand of cards on this if all you state is accurate.

One final note, if you have photo or video evidence of the condition of the unit upon starting, that too is one more feather in your cap.

While I respect the opinions above, I think it is important to also point out that the advice provided is one persons opinion and advice, as strong as it is presented, it may or may not be best for YOU. Waiting 5 months sitting on $1M for the perfect sure thing investment is fine. On the other hand, not sitting and investing that money in perhaps a lower producing return but having the funds working all year may (perhaps) deliver a net higher return in the end. One must consider both options and everything in between.

As far as bad agents, bad advisors, etc. that can be said about an industry around the world. I think it is important to look at the persons track record to determine how much they actually care about you (which in the long run equates to making themselves more money). Sebastian said it best above. Some people are short sighted and go after the quick money, not taking into account their clients best interests. On the other hand, there are people out there (I know one personally - the one typing this) who has put reputation and performance history along with clients best interests over his own. I have had investments turn bad and paid back each investor because  I personally promised to do so. I have swayed a client to buy a less expensive property because the investment was better long term even though my commission was smaller for doing so. Doing these things is looking at the long game, not the short game. There is not one previous investor I know who would. It trust me to lead them into the next project as they know that even when crap hits the fan, I will still be there to make things right. I am not the only one out there who is capable of this. So not trusting anyone is probably not great advice in my book. My advise is verify, verify more, and then trust. Due diligence is everything.

Understood, congrats. That makes it a different story then. As others stated, get a few quotes from some painting contractors and with your skill sets, you can know if they are doing a good job after day 1.

 I can't speak intelligently on the section 8 or housing authority workings as I have no experience in that, but I can tell you that finding the rental rate is done via comps in your area. Get with a real estate agent and have them pull lease/rent comps in your area, this will give you a great idea of what rent your unit can pull.

Did you find your answer yet? This same question has been asked and answered here on BP numerous times. Some time spent searching through posts or using the search function could bring up plenty of them.

For contracts in CA, I suggest you simply get a PSA (purchase and sales agreement) from any agent. It will have all the needed CA disclosures and such as well.

The advice of "get it under contract" is guru crap, don't listen to it. Have your ducks in a row first before you make offers.