All Forum Posts by: Scott E.
Scott E. has started 20 posts and replied 2581 times.
Post: Renting to Unmarried Couples
- Contractor
- Scottsdale, AZ
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Do the sisters qualify on their own?
Post: New to flipping. Do I really need a General Contractor?
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- Scottsdale, AZ
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You have 4 options...
1. Get your license
2. Hire a licensed general contractor
3. Have 'your guys' get licensed
4. Fire 'your guys' and hire licensed sub contractors
That's it. Period end of story. You do not want to expose yourself to the unnecessary (and endless) liability of hiring unlicensed workers for what you're describing as full home renovations.
Post: What would you do - Tenant broke AC
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- Scottsdale, AZ
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Here are some of my thoughts...
-How does the tech know that the thermostat was left on at 45 degrees for several weeks? Is there really any way to prove that? (I didn't even know thermostats went that low lol. My wife gets too cold if we have ours set below 72)
-Your profile says you're in Chicago. A quick google search tells me that in Chicago, tenants have the right to air conditioning when it gets hot enough outside. I'd do some more research or a talk with an attorney, but sounds like it doesn't matter what's outlined in the lease.
-$3500 is a very reasonable price to replace a unit and lines. That same job would cost around $8000 where I live!
-Whether you do window units or replace the entire unit.. tough one. If you really believe this tenant abused your old unit, might be a good plan to get them a couple of used window units to continue to abuse. Then when their lease is up, reassess.
Post: What are you building costs for ADU's?
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- Scottsdale, AZ
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Quote from @Brad S.:
Quote from @Bruce Woodruff:
I just don't see how you get 'er done for $150 SF. I was bidding these out higher than that back when they first became a big thing in San Diego (Around 2018). The city was already giving out pre-approved plans which saved a lot of time, money and hassle...but building costs are what they are. Plus the special 'alleged green' requirements for CA were costly (mandatory mini-splits, special insulation, tankless WH, etc)
I'd be curious what you could net as a builder even with a system(s) in place. I'd bet it will be higher than $250 SF in todays market. And these are not all that attractoive for a builder anyway...kinda something to do when you're slow...
In 2017, I was able to complete a higher end 2700sf build for under $400k, which included the CA LID (Low impact development) requirement. That was an extra cost I had not been aware of when we started that project! My contractor amazingly knew how to get good quality work done for amazing prices, but unfortunately, that relationship soured for other reasons.
But, I am looking at nontraditional building methods, so I'm hopeful those costs will significantly differ from typical stick-built construction.
Just caught this after I made my last post. So funny... my first new construction spec build was in 2017. It was slightly larger at 2,872 square feet. But I built the thing for under $500k. Less than $175/SF. And this home was decked out with very nice, high end, custom finishes.
In hindsight I wish I had built 10 of them at that price. 2017 was a loooooong time ago. And times have changed...
Post: What are you building costs for ADU's?
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- Scottsdale, AZ
- Posts 2,655
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Quote from @Brad S.:
Quote from @Scott E.:
Yes $150/sf sounds very attractive, but I agree with Bruce. $250 is much more realistic. Even if you're building the thing yourself you're going to have a hard time building for $150/sf.
Thanks Scott! I appreciate the reply!
Yeah, I know this is going to be a challenge, but I do feel there is a big opportunity to find alternative ways to keep build costs down these days. Costs have skyrocketed for basic builds. I rebuilt my own house in 2019 for around $175/sf, so I totally get it, but I am up for the challenge!
Remodeling / Rebuilding an existing house is going to be cheaper per foot than new construction.
If you're building an ADU you're going to need things like..
1. Probably some site work/grading
2. A new slab
3. New sewer line ran to the unit (or septic)
4. New electrical panel
5. Water lines run from main to ADU
6. Not to mention all new framing, insulation, roof, drywall, HVAC system, wiring, rough plumbing, etc etc.
Not trying to discourage you. Just outlining a few reasons why you might discover that your $150/SF number is unrealistic.
Post: What are you building costs for ADU's?
- Contractor
- Scottsdale, AZ
- Posts 2,655
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Yes $150/sf sounds very attractive, but I agree with Bruce. $250 is much more realistic. Even if you're building the thing yourself you're going to have a hard time building for $150/sf.
Post: New Beginner flipping houses
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- Scottsdale, AZ
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Getting pre-approved to purchase your primary residence wont be more difficult for you. Even though you travel a lot for work you still have a "home" where your car is registered, you have a drivers license, you get mail, etc. If anything it will be easier since you're making more money now, which will improve your DTI.
Getting approved for a hard money loan to flip a house is another story. You are going to have a hard time convincing a hard money or private equity group to give a loan to a beginner who is traveling all the time.
Post: Capital Gains Exceeds $500k - primary residence
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- Scottsdale, AZ
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Quote from @Dallas Jacobsen:
Thank you for the valuable input! I spoke with a professional tax guy, and basically I am stuck paying capital gains on the gains above $500k (minus closing costs, minus significant improvements to our house like a new roof, etc).
I asked him about some of the ideas posted here:
1. Qualified Opportunity Zone fund: apparently you can't touch the money for 10 years. So I'd have to increase my mortgage on my new house by $500k, and wouldn't be able to use that $500k - meanwhile, I'd pay 5-6% interest each year on the $500k balance. That would stop being a benefit after a couple years. The QOZ sounds like a great idea for people who don't need the cash now - but unfortunately, I do need the cash now.
2. The STRs have to be equipment, not a residence. I'm not sure the details, but investing in an RV may be hard to actually recover your capital, since RVs are depreciating assets - they actually go down in value, not just a tax thing.
So thanks again for the input, and count me as a contributor to paying off our Country's national debt.
Your goal should be to get those gains as close to $500k as possible.
Post: THIS is where AI is going to change the game for real estate investors
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- Scottsdale, AZ
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Quote from @Jaron Walling:
@Scott E. Not RE related buy I'm convinced AI is going to kill radio and damage the music industry.
Artists are already creating fake music with AI software and filters. People can sing a few lyrics and sound exactly like popular artists. The voice can be changed from male to female, or vise versa. You can't tell the difference when you listen. We won't need radio DJ's to present the news. It could disrupt the marketing side of the business too.
Crazy... see just 6 months ago I couldn't have even wrapped my head around this concept. But now it makes more sense to me and I imagine what you're describing will be disrupting the industry within a year or two at the most. This is moving fast...
Post: THIS is where AI is going to change the game for real estate investors
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- Scottsdale, AZ
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Quote from @Nik Moushon:
@Scott E.
I don't say this in a mean way but....your comments show you don't understand what architects and engineers truly do. You think we only draw pretty pictures and put construction drawings together. I can tell you that design is only a small fraction of the time spent on a project. Construction drawings are a much larger percentage of time but not the key point. I spend 60-70% of my time, on pretty much any project, doing things that aren't designing or drafting. There are so many components to a building that AI can't ouch....not in 10 years anyways. Maybe 50 years....maybe. We are way way too far away from jurisdictions allow AI drawn building sets to be approved without a licensed professional human behind them.
It is 100% true that AI will be disruptive to many fields...including architecture...but architecture is not a field that is getting replaced by AI. We will definitely be adapting and using AI in our profession going forward but it will only make us more efficient and effective...not obsolete. The good ones will be able to raise our prices, not lower them, since we will be able to get you a full set of drawings in a fraction of the time. Time is money. For all parties involved.
I do understand what architects and engineers do. I've been flipping and building houses for over 10 years and I am intimately involved in the design phase of all my projects.
I also do not think architects only draw pretty pictures and put construction drawings together. I have an immense amount of respect for what architects do from a technical and a creative standpoint. I'm sorry if my comments came across any other way, that wasn't my intention.
Trust me I'm not saying that I think that AI will 100% replace architects. I said it in my original post that I know there is always going to need to be some human involvement here. But with as fast as I see this technology evolving, I can't imagine how advanced things will be in 5 years time.
If you asked me (or most people) just 5 years ago if there would be self driving cars roaming our streets, people would have thought you're crazy. But where I live, I pass by no less than 5 driverless cars per day now. We're talking 100% driverless. These are fully functional cars, driving down major city streets, with no humans inside.
Your last comments show that you and I feel similar about the situation. AI will be a great tool to make architects (and interior designers) more efficient and effective, not obsolete.