All Forum Posts by: Juan Cristales

I interviewed several architects and settled on one. My pitch was simple: I want to keep doing the same basic plans over and over. If anything needs adjusting, it will be absolutely minor. Since I keep building the same "rectangular shaped" duplex, the builder plans are just a copy/paste and so he just does it at a significantly lower price. 

Starting with a new set of plans every time is going to certainly increase soft costs for sure. Hope that helps!

 I don't know how I missed this! My bad!

"legal contracts/terms to use with contractors" - THAT'S A GREAT QUESTION! ANYTHING IS BETTER THAN NOTHING SO IT'S GOOD THAT YOU'RE LOOKING TO GET SOMETHING WRITTEN DOWN. MINIMUM ITEMS TO HAVE. SCOPE OF WORK (SEEMS VAGUE BUT FOR DUPLEXES, IT'S ONE FOR EACH SIDE), WHEN THEY CAN REASONABLY EXPECT PAYMENT (WE NORMALLY PAY AFTER THEY HAVE PASSED INSPECTIONS, NOT BEFORE), LENGTH OF TIME FOR WORK (IN NEW CONSTRUCTION SOME TRADES ARE DEPENDENT ON OTHERS TO DO THEIR WORK SO YOU HAVE TO HAVE SOME PATIENCE WITH THAT... FOR EXAMPLE, THE ELECTRICIAN CAN'T FINISH UNTIL THE HVAC GUY IS FINISHED... THE HVAC GUY CAN'T FINISH UNTIL THE CABINETS IN THE KITCHEN ARE FINISHED AND THE MICROWAVE IS INSTALLED... THE APPLIANCE GUY CAN'T FINISH UNTIL THE CABINETS ARE COMPLETELY FINISHED AND THE BACKSPLASH, IF ANY IS FINISHED).

"how to secure best pricing for finishes/fixtures" FOR CABINET AND DOOR HARDWARE, AMAZON HAS A TON OF PRODUCTS WITH 1K+ REVIEWS THAT YOU CAN SELECT FROM. THEIR PRICING IS MUCH BETTER. I WOULD NOT BUY PLUMBING FIXTURES FROM AMAZON OR ELECTRICAL FIXTURES UNLESS THEY HAVE A TON OF REVIEWS.... PLUMBING WE GET FROM HOME DEPOT OR LOWES. 

"whether $500-650 range is too risky for a first build" IN ANY MARKET AND IN MY OPINION, THE NUMBERS AND THE DATA NEVER, EVER, EVER LIE. YOU HAVE TO PULL SOLD COMPS, DAYS ON MARKET, FIGURE OUT THE FINISHES AND START TO BUILD YOUR BUDGET. WALK SIMILAR PRICED HOMES IN YOUR MARKET TO GET A FEEL FOR AESTHETICS. 

HERE IS A DIRTY LITTLE SECRET BIG BOX BUILDERS NEVER TELL YOU: THEY DON'T GET 3 BIDS FROM EVERY TRADE. THEY SET THEIR PRICES AND GET CONTRACTORS WHO CAN FALL IN LINE WITH THOSE NUMBERS. WE USE A % BASE. MEANING, AS A PERCENTAGE OF THE ENTIRE BUILD, WE ARE BUDGETING 5% OR WHATEVER, FOR THAT PARTICULAR ITEM. I KNOW THAT I CAN DO 6% BUT CERTAINLY NOT 10%. ALL CONTRACTORS ARE REQUIRED TO PASS INSPECTIONS. 

Hey thanks so much for the message! 

Definitely a game-changer... I wish I would have started in new construction but I can't go back and change that. I have a younger investor here (18 yo) who is about to start his first new build and I told him today, that he would know SO MUCH MORE after finishing than he would from just doing fix-n-flips. 

Hit me up man!

Juan-

I'm in the Houston market. SFR rentals have gotten increasingly more difficult to buy and have them cashflow.

Rates are UP.

Insurance is UP.

Taxes are UP.

Values... we are seeing some price drops but it isn't enough to make $300+ cashflow.... maybe flat at best.

So... what's the alternative? Build your own duplexes. 

Have you thought about building? What questions do you have about it? Happy to answer any questions...

Juan-

Call it what you want... 

I look back on some of those houses I did back in the day and they were absolute piles of manure. No joke. Check out these gems:

Or maybe this one:

I'm a big advocate for landlords and flippers to learn the new construction game...

1. It's more predictable

2. Less "surprises"

3. Duplexes have double rents making the DSCR refinance, SO much easier.

Final product:

Here is the bathroom:

What's your biggest question when it comes to NEW CONSTRUCTION? Maybe I can help.

Juan-

That's awesome Jason! Way to stay on it!

If this were me, I would try to play it firm but chill. If the tenant has not made the lease payment for the month, then he's in breach of contract (if that's what your lease states). I would CLEARLY notify him that he needs to pay for the last month and document by taking pictures of everything.  That means taking pictures of you posting the sign on the door since you can't access it anymore. All you're doing is enforcing the lease that was agreed upon and signed. You know the evictions for your area better than we do and I think people are going to hesitate to give too much "advice" since it can quickly be a legal matter. Don't let them get away with it. They're only going to burn the next landlord wherever they go. That's my opinion on the matter. 

Prior to concrete, this conduit gets put in for the island that will need electricity in the kitchen.

At a different Duplex Project, we have the siding almost complete.

Finding cashflowing SFR has become increasingly challenging.

Have you changed your strategy? What are you doing different?

Build 2 Rent,

Juan-

I used to think that I needed to be an expert at some of this stuff before i started but the truth was that i didn't need to be. You see the people we hire to do the work know UPFRONT that they need to pull permits for everything and that they need to stand an inspection.

This gives them ownership of their portion of the project. 

They also can't fully be paid until the requisite inspections are complete.

Let me know if you have any questions!

Juan-

The best place to always buy real estate is in places where it has always been great to buy real estate for the last 20-30 years: Places with the best rated schools. This isn't the sole factor but it certainly helps mitigate the risk for someone looking to break into the business. These properties typically move faster and are sometimes in better shape. 

Best of luck and stay the course!

Juan-