All Forum Posts by: Karen Margrave

I think you need to be more specific. I think what you're looking for is something like Matterport. You can go to their website and find people in your area that does that. Good luck. 

On the foundation, electrical and decking, get actual bids from licensed contractors. I don't know what the licensing requirements are in Chicago, but in CA inspectors aren't licensed contractors, and that's why you see the notations to contact a licensed professional. In CA we also have a standard 17 day inspection period at the end of which we have to have Request for Repairs in. Sellers don't have to respond to them, but usually will agree to doing the Section 1 pest work. It's also when you negotiate a lower price if the work warrants it, etc. 

As to the basement, as the agent above indicated, there has to be 7" height from finished floor to finished ceiling in order to meet FHA guidelines.

ADU GEEKS and PLUS HOMES are both BP members, and are active in the San Diego market. As for Boxable, they're YEARS out on shipping units to new buyers. Great concept, but just getting their manufacturing going. You can also look up Manufactured ADUs. Most dealers can help you through the process.

I advise clients to look at both the STR and LTR markets in areas, and understand who their client/tenants are. Having weathered recessions, crashes, and boom times, one thing I know for certain is that these circumstances we are experiencing are unprecedented, and there's no calculating what will happen. By understanding local economies, it helps somewhat buffer buyers. If STR crash, is the property still going to have a high demand in the LTR market, and will it bring in enough to cover expenses? If not, do not buy, unless you, yourself are in a position to carry the difference, or the property.

I recently discouraged a client from buying in an outlying area, though the rental was in a beautiful setting, perfectly furnished, etc. However; it only had a few months rental history. With gas prices being what they are, I know it will affect the number of people visiting the area, and the people nearby to service the property for cleaning, maintenance, etc. was undependable. 

At the same time, our area, which is a small city, Redding, CA still has a very strong demand for both STR and LTR. We had wild fires destroying homes, a big influx of Covid refugees from bigger cities, a growing area with an abundance of natural resources surrounding us.

As a Realtor and a builder that has built spec construction in the past, I can say, DETAILS MATTER. That's why it's imperative to find honest, knowledgeable Realtors in whatever area you are planning on investing in. Experience has value. Knowing how to look at properties from various perspectives, not simple formulas, is important. I see all too often investors that come on to BP and think every formula works for every location, and it's just not true. Everything is location specific, and formulas are general. Look at ALL the details. 

It's area specific. Someone must do zoning or planning in the town. Is there a code enforcement officer? Some areas only allow STR in very specific areas, some require licensing some don't. In my area on a Bed and Breakfast there's a component that requires owners to live on site. For STR you have to get a permit. You want to find out before you spend the money to furnish, market, etc. what your town requires. You may be the first one doing it, so will set the precedent.

I am not in the STR niche. I have however been in real estate and construction since 1984. I have been through a few recessions, and the crash. Everything before now was somewhat predictable. We have never had anything close to the circumstances we have now, and anyone thinking they know what's going to happen is lying to themselves. We have tight fuel supplies, meaning everything that is transported by anything is costing more. We have stores unable to replenish supplies. Small businesses are paying more for materials and supplies, rent, utilities, labor, insurance, etc., and hanging on by a thread. Now we have high interest rates being imposed with the sole intent of crushing real estate and construction, and it will affect every segment of the economy.

As to your STR, it will depend on where they are. The more popular areas will be least affected.

Once jobs start being lost, it's game over, and everything can come crashing down. You can't calculate the impact this will have, nor how long it will last, it will depend a large part on how fast the U.S. can start producing fuel, and stabilizing the supply chain. It's definitely one of those sit down, buckle up and hold on times of life! 

I wasn't saying you attacked me. I was saying making a blanket statement that NO contractors can be trusted was foolish for a Realtor to be saying. Hopefully none of your local contractors are BP members, but I wouldn't bank on it. 

As for throwing my analysis of the market, I don't think saying if it's a competitive market it's reasonable for a contractor to charge a fee for bids etc. is a disservice to the OP.  It's not at all obvious she's being played. What's obvious is she needs to set boundaries, take control of the situation,  get the information she needs, and obtain other bids to compare to. 

You haven't really given enough information. You say you got a hard money loan and have about 250k into it, so how much did you purchase the property for, and what exactly do you owe? What did you get for your money, the land? Any infrastructure finished such as sewer lines, water, electric, or ? What improvements have to be made to get the lot ready to build the structure? Is it on a paved street? Sidewalks required?  What is the land worth as it sits? 

If you owe 250k is it secured by a note with a 1st deed of trust? If so, then for a lender to do a loan would require that the holder of the note on the 1st would subordinate and go into 2nd position, meaning the $200k or more needed to build the house goes before him. That's a huge risk for the holder of the first note.  

As for getting past the experience portion, the only way you can do that is to find an experienced builder to build the house.  Or, maybe you could get a builder to buy the property and as part of the same contract agree to sell you the house at X amount, with plans to be approved by you before close of escrow on the land.  Get a real estate attorney to draw up the contract. 

I live in CA and have no clue what your permitting process is, what is required of builders, etc. In CA it's ridiculous, so I may have asked questions that do not pertain to you. 

 I'm surprised a Realtor would make such a blanket statement about contractors, aside from being incorrect, it's a foolish. 

@Roselin G. If he has given you a quote of 65-70k he has to have an idea on what he based that figure and should give you a rough estimate. Many contractors upcharge work done by subs and on materials. I've never done that, but it is done. He probably doesn't want you to see what work is being done and the actual cost as he's making money off the other contractors. That's ok, but he should be upfront about it. 

Get bids from other contractors for the work you are wanting to have done. Check licenses and bonds if they are required in your area. Check references. 

Just because a contractor is doing a lot of work in an area doesn't mean it's good work. I've seen contractors here in my area of Redding, CA after the fires, get so overwhelmed by taking on more work than they were capable of actually doing, and alot of homeowners that had lost homes were left to clean up the mess. If you don't feel right about something, don't do it.