All Forum Posts by: Account Closed

We are wanting to increase the number of concurrent projects which necessitates using GCs in addition to our own crews. For those of you using GCs for your flips, what profit percent are you expecting to get?

Check out some of the national hard money lenders here on BP. 

Renovations are different than new construction. Many new construction contractors will tell you they can do renovation, some can, most can't. Interview the contractors as if you were hiring them for your business (which is what you are really doing). Get references and follow up on them - this is critical, follow up on references! In the interview, ask some renovation specific questions:

• We are moving the kitchen sink of a slab house to a different wall. What is the best way to handle the plumbing?
• When taking out the bathroom vanity, we discovered major termite damage in the wall. It is an interior wall. What would you do? (Part of the answer you are looking for is inspecting for more termite damage, specifically in the top and bottom plates. Termites seem to love to run down top and bottom plates.)
• If you give me a budget and you go over, who pays for that?

It would also be a good idea to go through a contractors licensing course (available online for your state) so you can talk the talk. You don't need the license, just the  educatation so that you protect yourself from being taken advantage of and you will be better able to estimate costs.

Talk to experienced out of state investors first. Out of state works for many investors, but it is different than investing in your area. High quality property management is CRITICAL. 

Working with people will get much better results.

She is a paying tenant. That is money coming in. The empty units are paying you nothing. Where should your focus be?

She probably knows she has a sweet deal. How can you make this a win-win situation?

Foundation problems are good opportunities to buy at a discount because most people are afraid of foudation issues. This means most sellers will come down significantly when a foundation problem exists, Most foundation problems are not as bad as they look. Stipulate an inspection period in your offer. Get a reputable (can't stress this enough) company to do an inspection and give you an estimate. 

In my market, most of the houses are on piers. We've done houses with as little as a $1,000 of foundation repair all the up to $40,000. The thing that matters is if you have room in your budget to handle the cost. 

@Account Closed, The backyard isn't big enough for a pool. Coming in from the driveway (which where most guests will enter from) to get to the deck and entrance into the house, there is only about 2 feet (if that) between the house and the pool. It is a serious safety problem.

Limted liability is one of the reasons to do an LLC. You have a layer of protection. DBA doesn't protect you. The LLC can, and should, have a commercial liability policy in effect. You can always have a personal liability policy (not a bad idea to have one anyway). This isn't affected by you having an LLC.

I have several LLCs, one for flips, one for rentals, and one for speaking/training/coaching. That way if there is a suit against "me" in one LLC, not only are my personal assets protected, the assets in the other LLCs are protected.

Setting up and maintaining an LLC is easy and cheap.

With the LLC, you can open a business checking account (many banks offer free checking) and have your tenants write the check to the LLC. This is important because it keeps the corporate veil in place. (That is, you are not mixing you person assets with your business assets.)

Leveraging shouldn't be a problem. The asset is still yours because you own the LLC. Some financing options require that the property is in an LLC.

As far as property management, you will need to check with the laws in your state.

Yes, it is concrete. Drainage is a big concern around here. Anything that has the potential to affect drainage is closely scrutinized. Punching holes in the bottom has a decent chance of not passing inspection. I don't have a clear answer on that and I don't want to find out the wrong answer the hard way. Removing the pool is the safest bet. If it is too expensive, I'll pass on this house.

One downside to vinyl is durability, especially when tenants move refrigerators and heavy furniture. Somehow, they find a way to tear it. I would go with a good laminate or a low cost tile. If you really want vinyl, consider peel and stick vinyl tile or planks. If some get damaged you can easily replace the damaged pieces. Just make sure to buy enough to have repair stock because you never know when a style will be discontinued.

We use Builder's Risk. Some companies only offer fixed terms, 6-month, 12-month. There are insurance carriers out there who offer monthly BR policies. The best option, if you can find it, is a reasonable term with a month-to-month renewal. Different states have different regulations, so find out what is allowed in your state.