All Forum Posts by: Craig Jennings

As a contractor and investor this always surprises me.  As several others have already said, its not up to the contractor to determine the finishes to be chosen.  I work exclusively with investors and I don't pick anything.  I don't want to be responsible for picking finishes that the owner ends up not liking.  That's what a designer does, not a GC.  All my clients get a list of selections I need at the beginning of the project.  

I can't over emphasize enough, spend as much time as you have to on the front building a detailed scope of work.  Take it down to the SKU number if you want.  You want to contractor to put in the finishes you choose.  It's your investment.

I use XactRemodel in my contracting business.  I love it.  It does have a pretty significant learning curve and requires extremely detailed review of the job site.  It's the exactness of the product that I love so much.  Exactly what I put in is what it produces a bid for and the client knows exactly what they're getting.  Feel free to reach out to me if you want to discuss.  

Good thoughts on getting started.

As a GC and investor I am always surprised at how little due diligence many investors put into projects.  As was mentioned above, the time and money you will spend having a solid GC eval projects with you is invaluable.  

A few guidelines I have for doing walkthroughs.  If the property isn't under contract and I may not be bidding to get the job, then I'm charging for the walkthrough and any additional work I do.  It costs roughly $500 for me to review a property and spend a few hours outside of the site putting together rough draft pricing.  My time is valuable and I've gotten burned too many times by investors who ask me to come out and look at a project with the impression they own it and I'm bidding.  Only to find out later they just wanted help on estimating rehab costs so they can decide if they want to put an offer on the deal.  Not cool.  If I've got a chance at winning the work, then the walkthrough is the cost of doing business.

Don't under estimate the value of a good GC.  I've seen many people decide to be their own GC that have limited experience and end up getting burned and the project costing more than if they would have just paid the extra 15% to 20% to the GC.  Experienced, quality GC's will know what to look for that may not be obvious on projects and how to manage the unexpected.  Also those with experience will tell you that their time is better served finding deals than managing projects.  Subs are a pain in the a$$ unless you've got a solid GC with good contacts.  How many stories have we seen about the difficulties of managing contractors?

I specialize in working with investors and I also invest. So when I go into a property my first questions are flip or hold? What's the ARV? What's your budget? How many deals have you done? How are you financing it or is it a cash purchase? These questions may seem inappropriate but they give me an idea of what I'm dealing with not just in the job but with the entire investment deal. None of this if for me to pad my bid or try to jerk someone around. What I've learned from working with investors is that many people get into bad deals and the contractor ends up caught in the cross fire. Especially when unforeseen things come up and they always come up. So I ask these questions to guide the project correctly from the beginning.

If there's any advice I cannot over emphasize, spend as much time as possible on the front end and learn how to estimate rehab costs.  Learn to build your own scope of work and put numbers with it.  The best flips I do are with investors who spend tons of time on the front end with their due diligence, give me a very detailed scope down for me to bid and have clear timelines that are realistic.  They know what they're dealing with and have a solid plan to manage it.

Good Luck!

I think the "guru" influence is what creates a climate of hesitation and over-analyzing deals. So many people think there are deep dark secrets to REI that they have to pay someone to tell them. I see a lot of investors in my area going with the large guru group out of San Diego ( I'll exclude the name, but people can figure it out). They pay $30K for these guys to tell them all the "secrets". There aren't any secrets in my opinion. Like any business or industry there is knowledge you have to obtain to be successful in it. You don't have to pay for it. BP and your local REI groups are great resources for this. The gurus always have a new secret that they are selling to everyone. I agree with Jim...they want to pay someone else to build a guaranteed winner portfolio. Like he said....it don't work like that. The secrets are hard work, determination, taking calculated risk, and learning from your mistakes. Taking $30K and buying your first house will give more of an education than anyone can teach you.

The local REI group is KREIA. I find it to be overrun with people selling their own programs on how to do real estate investing. So I don't attend. I know several other investors who feel the same about it. However I'd suggest attending and decide for yourself.

There is no court order in place.

I'm not comfortable changing the locks. I'm going to offer her the option to terminate the lease, stay through May and I'll keep the deposit for the May rent. Problem is she hasn't decided what she wants to do.

I don't think it's a domestic violence situaiton at this point, however you never know what may happen with these situations. I just don't want their drama or have it escalate into something more.

Thanks to everyone for all the advice.

Spoke to a local real estate attorney this morning who specializes in landlord-tenant issues.

His advice is to go ahead and change the locks at the remaining tenants expense. He stated that she needs to make the request in writing indicating that she is concerned about her safety.

He stated that there is no way to get the vacated tenant off the lease. There isn't a provision in local tenant laws to amend the lease. He liked the offer I made to pay two months rent and call it even just to get them out of the house. So maybe that will work out.

I have to admit I still have mixed feelings about changing the locks since it is locking the vacated tenant out of a property they have an active lease on and are current on rent. Basically the attorney said he could potentially have recourse against me, but recommended I take the chance he won't act on it so the remaining tenant is protected.

I'm looking for guidance on this situation. I'm in Louisville, KY and have a small home I rent to a young, unmarried couple with a infant. They are in the 9th month of a 12 month lease. They are current on their rent and their have been no issues with payment. The boyfriend moved out earlier this week. The remaining tenant called me last night to inform me. She is unsure what she wants to do that this point as far as staying. She is also concerned about the boyfriend coming back to the house while she's not home. She asked a few questions that I think I know the answers to, but want to verify and get input from others.

1. She asked if the locks on the house could be changed to keep him out of the house since he left. My thought is no at this point.

2. She asked about getting him off the lease although she isn't sure she wants to stay in the house. My understanding is that the original lease would have to be voided by both parties and she would have to enter into a new lease. One thing I'm not completely clear on is if the original lease can be amended to remove his name and just have her?

Since there is just 3 months left on the lease and they have been good tenants I made her the following offer. Pay me for 2 months now, I keep the deposit and she can stay for the remainder of the lease. My thought is just to ride this whole situation out without much drama or lost rental income and get them out of there.

Any thoughts or suggestions would be greatly appreciated.

I'm seriously considering the purchase of a vacant former drug house in a rougher part of town. I can buy it for $5K with an ARV of $49K. Obviously it's a total rehab. Anyway, since I'm still getting start I perform a share of the rehab work on my own and contract out larger portions. There have been ongoing problems with homeless folks shacking up there. I've spoken with a neighbor who try's to run them off when he sees them or calls the police. I've never dealt with a situation like this and would like to know how others secure property in rough areas while completing a rehab. Any tips are appreciated.

Thank you to everyone for the replies. It's very helpful.