All Forum Posts by: Michael Baradell

@Chris Adams  The funny thing is, he came to me with a very nice contract on his company letterhead, business cards and all. I have reached out to the siding guy as well and he will not respond to him either. I did leave a part out however, I did get in touch with him Friday night around 8pm after I had a friend call him and leave a message as if he were looking for him to do a job for him. He immediately called back at which time I got on the phone. He was completely caught off guard and gave me some BS excuse about how the concrete company is giving him the runaround as well. I told him the job needed to be completed by Saturday or I would need my money back. He said he would not refund me but he was planning on completing the job on Monday. Well it is now 4:37 pm my time and the job is still not complete. I will do everything mentioned above to make his life as difficult as possible. Fortunately for me it was only $1200 but he needs to be taught a lesson. 

@J Scott  he is licensed so that is something I will pursue for sure. We live in a relatively small city so I'm pretty sure the word will spread quickly. 

@George P. Haha you are absolutely right. It will not happen again, for sure!!

Hey BP,

Well I guess you can consider me the bone head of the week, but I was recently had by a sub. I neede a small concrete pad poured so I asked around and found this contractor through my siding guy, who is reliable. It was a small job so I didn't bother with doing any research on him. Long story short, he asked for a deposit $600, to lock in the price of the concrete, I gave him a check. Two days later he showed up as he said he would to form and was also planning on pouring that day as well. I had to leave the site so I left a check in the mailbox for the balance, $600 as I would not be able to make it back to the house after the job was complete. About an hour or so later it begain to rain so he decided it would be best to put off the pour until we had a clear day. I spoke to him throughout the next week. His story was that the rain had backed up the concrete company as well so my job would be done at the end of the week. Fast forward three weeks, now he is not returning any of my calls or messages. I can not wait any longer as this has already set me back three weeks. I have found a reputable guy who will do the job ASAP, but my question is, what can I do to make him feel the pain of doing this? I know I will probably never see that money again, but I want him to pay for this. 

@Bill Jacobsen  thanks for the response. Would you mind explaining what a 7 cap is and how you came to that number?

Hey Guys,

I will be finishing up my second rehab property in a few weeks. I have a few solid options as to what I can do with the property, but I am curious to see which way you guys would go. 

Breakdown:

Purchase Price- $75,500

Rehab and Carrying costs- $44,000

Out of Pocket- $7,000

Construction loan on a 5/1 arm @ 4.65% 

Taxes- $700. Insurance - $1,300

Option 1: Traditional Sale- List Price - $149,900 Target price - $145,000 will sell quickly at this price.

- Notes- 

I am a licensed Realtor so I will only pay 3% for realtor fees ( unless I find buyer than no fees).

Option 2: Rent out - Will rent very quickly at $1,300 but because it is a 4 bedroom in a predominantly 3 bedroom neighborhood, I will ask $1,400. Comps support this price. Holding costs - $850 conservatively.  

- Notes-

This would be my first rental property. Buy, rehab and hold will be my strategy however, I do plan on flipping from time to time to build cash reserve. 

Option 3: Sell Bond for Deed - Sales price- $149,000 ( non negotiable ) $10k minimum down payment and a minimum interest rate of 7%. Term of 2 years. 

- Notes - 

I have sold three properties BFD ( as realtor ) and am currently selling primary residence BFD. BFD is very desirable in this location and home will sell in less than 30 days. 

I think all 3 options are solid but being new at this I was curious on BPs opinions. Any and all feedback will be helpful.

@John Lewis Welcome! BP is a great resource to have. I am also from South Louisiana out of the Mandeville/ Covington area. Where exactly are you located?

$2,000 or $3,000 should be pretty close. If you have the $12k for realtor commissions, why would you not just use that as a down payment and let him pay the commissions? He was fine with paying the commissions from the very beginning. I can appreciate you being sympathetic to his situation, but always remember you are making this transaction ( or any transaction for that matter ) to make money. You are already helping him accomplish his goal by taking control of the property. Now, on the flip side, I would never accept a BFD as a seller without a substantial DP. Just my thoughts.

@Ryan Ruiz what are the exact terms that you and the seller have agreed to? Unless you have agreed to pay the realtor commission, then you should not be responsible for that. The fees will be that of a typical transaction except closing costs should be much less due to the fact that there is no financing involved.

@Pat Martin thanks for the response. I can see where you are coming from with the "Dave Ramsey" philosophy, however I don't believe that philosophy is always accurate because each scenario is different. For example, I was able to purchase this property 4 years ago with 100% financing at a low rate for 30 years. I would not qualify for this now a days due to my income. I am all into this property for less than $4,000. So, even though it may not be the ideal rental ( just because I paid retail for it ) I still think it makes since to keep it. I am flipping property's at the moment, but I do plan on building a rental portfolio in the next few years. I think this is the easiest way to get started. Thoughts??

I was curious as to what the savvy investors think about purchasing a home warranty for a rental property?