All Forum Posts by: Benjamin Sulka

@Allan C.Totally agree 100% and I should have prefaced the entire post as this should be used for newbie investors with limited cash on hand to get started with short term holds/BRRR. Comparing a seasoned investor and their leverage/equity/cash position is going to drastically change how they evaluate areas for growth and their portfolio building strategy using specific metrics. Most of the first time investors I know with have limited DP money and need to cash flow from the start or they will not be able to fund their LLC's operating expenses, PM, build reserves, etc to acquire more doors in a reasonable time frame. I'm coming from the syndication side, so IRR is very important to the mix as well. It was my mistake to blanket statement that CoCr was the most #1 priority vs. other key metrics to use in specific situations based on type of investor and their goals. A very liquid cash investor is going to have a different mode of attack vs. a financed investor from day#1. I'm old school so if it doesn't cash flow after I perform a BRRR, then I'm not banking on appreciation even if growth trends show it. NOI vs. APPRECIATION is a whole other argument :)

Quote from @Michael Mannino II:

No payment until the project is done! Our company will pay for materials once they are (confirmed) on the property, but the labor is not paid until it's completed and approved. We have a few crews that we have established a full spreadsheet list of every product we use and every dollar amount for labor we pay for each item (ie- to install a bathroom vanity, or price per sq ft we pay to paint the interior, etc.). This has taken out any question of what they get or when, our systems and processes take out the hassle of negotiating labor prices and payment schedule. Would love to chat more on what we do if you have any questions, please message me any time! (: 

So you get a licensed GC to pay for materials and have them delivered before he gets any money from you? I guess if I had done a lot of work for you already, that would be comfortable, but never for a new client. Not because I couldn't afford to, but I expect the client to put some $$ in the game before I trust them. It isn't about the money, it's about the trust.

There are a LOT of scammer customers out there. Not you maybe, but Contractors (especially young ones) need to be really careful. I would never do business the way you're describing...but if it works for you and your guy, then keep it up.....

No payment until the project is done! Our company will pay for materials once they are (confirmed) on the property, but the labor is not paid until it's completed and approved. We have a few crews that we have established a full spreadsheet list of every product we use and every dollar amount for labor we pay for each item (ie- to install a bathroom vanity, or price per sq ft we pay to paint the interior, etc.). This has taken out any question of what they get or when, our systems and processes take out the hassle of negotiating labor prices and payment schedule. Would love to chat more on what we do if you have any questions, please message me any time! (: 

When it comes to real estate, be wary of any offer that requires you to pay a substantial sum up front. While there are some legitimate deals out there, many require an upfront payment that is far more than the actual value of the property. It's always best to do your due diligence and make sure that any transaction you enter into is in your best interest.

50% up front is normal in my neck of the woods so the contractor can buy materials. The minute you pay the contractor 100% before the job is satisfactorily done, you have lost ALL leverage to get them to call you back, text you or to complete the job in a timely manner. I don't care how well i know the contractor, it's a bet I won't make. Someone asking for more than 50% is not someone I would do business with. Someone asking for 100% so they can buy materials and pay their workers is someone that has absolutely no money in the bank and is absolutely going to screw you. 

yea, pretty much always a bad idea.

I always pay 40-50% of the work after 60% of the work is done @Carlos Valencia @Albert Bui

Learn from your friend. Do not pay contractors a dollar until they complete work.