All Forum Posts by: Juan Cristales
Juan Cristales has started 27 posts and replied 168 times.
Post: Things are looking up in North Port FL
- Investor
- Willis, TX
- Posts 182
- Votes 92
Totally get that. We've been trying to close a refinance for about 8 weeks and it's just now, this Friday, coming to fruition. The market is definitely uncertain at the moment.
Juan-
Post: Land owner looking to JV with Builder/Capital Partner
- Investor
- Willis, TX
- Posts 182
- Votes 92
Nice little homestead for someone or destination BnB. Did you end up putting it on the market for sale? How is the market there?
Post: Deal structure - small land development
- Investor
- Willis, TX
- Posts 182
- Votes 92
I'm following along with what you're saying and it makes sense to me. Not giving you legal advice here bro, just an opinion. I think that from a risk standpoint, you incur a lot less risk by being the lender on this than being a genuine partner, just as you have described above. Since you know you want to be completely hands-off, you're describing an ideal scenario for you.
What does the builder say? What's an ideal scenario for him?
Probably about 10 years ago I read somewhere that the reason deals go awry is because the people involved never sit down before the project and clearly define their roles and responsibilities. (Wait.. Michael Gerber's book... The e-Myth. Great read.)
Anyway, writing down all the stuff that needs to happen to get this deal to the end-zone of a payday, including realtors, title co, etc... needs to be assigned to someone so that it's later not misunderstood.
Congrats on the find! Let us know how it goes!
Juan-
Post: Two Permits Approved! Day 01!
- Investor
- Willis, TX
- Posts 182
- Votes 92
The dingy permit on the Left is the Demolition Permit. We had to get rid of a junky old house on the property. It took longer than I would like to get the permits BUT we have the permits now! The TWO clean new ones on the right, are the building permits.
I'm building a DUPLEX on this lot. Since each side will have it's own water meter and electric meter, we will need a permit for each side. Not to worry... it's all part of the budget and the process.
We're starting from zero and will look to get this stood up and going as soon as possible.
Duplex Build2Rent,
Juan-
Post: Broke even on my first two flips - need advice from experienced flippers
- Investor
- Willis, TX
- Posts 182
- Votes 92
Disarming the nuke with a second left is a great analogy... it has the sense of high stress, catastrophic loss and the implication that more than just one person is going to get hurt...
I'm happy that you didn't lose money @Logan Howell and are willing to be transparent about it. That's a fantastic mindset to have and will serve you well going forward. Good on you for that!
Regroup. Go at it again. You've learned some very valuable lessons. Can't wait to see your success!
Post: Land owner looking to JV with Builder/Capital Partner
- Investor
- Willis, TX
- Posts 182
- Votes 92
Quote from @Jason Martinez:
Quote from @Robert Ellis:
Quote from @Jason Martinez:
I own 10.2 acres of undeveloped land in central VT. I want to build a small SFH or STR on it. It has very favorable zoning laws, the land is buildable, and the area has a housing shortage. Land is 40 mins from Killington 15 mins from Brandon Vermont (the perfect Vermont town) 20 mins from Middlebury. I do have a quality builder that could facilitate the build but not required for JV.
Is this enough to bring to the table? If the partner was only a capital partner and had no involvement with the build would a 50:50 split be worthwhile for the capital partner?
This would be my first JV and am open to any advice suggestions on the best way to proceed.
don't talk to the builder talk to a surveyor and your city about splitting. 10 acres is a lot of land. at a density of 4-5 units an acre you could get 40-50 lots out of that and do way better than the builder. builders have no value. it's a commodity. you have all the power. you own the land. I'd be looking to do an SPV and raise additional equity to capitalize the project and make it much larger if all 10 acres are buildable. you are going to have 400k in costs to do that kind of subdivision but you'll make way more we are looking to start doing the same strategy in Columbus Ohio now for large subdivision developments
@Robert Ellis I wish I could . The tiny town the land is in won't let you build with less than 10 acres.
So one house per minimum of 10 acres? Is that what I'm understanding?
Post: Things are looking up in North Port FL
- Investor
- Willis, TX
- Posts 182
- Votes 92
Congrats! That's super exciting! What do you think is the catalyst behind the sudden surge in activity? I'm thinking of offering seller contributions to help buyers buy down the rate.
Juan-
Post: Ground Up Duplex Day Driveway Inspection!
- Investor
- Willis, TX
- Posts 182
- Votes 92
Building inside the city limits of my little town has been and continues to be very rewarding. I saw the Building Inspector at Dairy Queen yesterday and he is such a nice guy. I used to be afraid of inspections but really, I was just afraid of the "unknown."
Once we have this driveway inspection completed and approved, we'll do some final grading and pour the concrete! We'll lay some sod down and paint the exterior.
Why I don't like to paint sooner? The orange-clay-like fill dirt... when it rains, it splashes back onto the house and stains the siding. So now we wait until the sod is in before we paint.
DuplexBuild2Rent
Juan-
Post: Advise Needed for New Builds (Sell or Hold) in Boothwyn Area Greater Philly
- Investor
- Willis, TX
- Posts 182
- Votes 92
Quote from @Charles Becoat:
I'm working on something similar. Who did your financing for new construction with no experience?
I'll message you someone's info who can be a little flexible for your first build.
Juan-
Post: Advise Needed for New Builds (Sell or Hold) in Boothwyn Area Greater Philly
- Investor
- Willis, TX
- Posts 182
- Votes 92
Quote from @Taoli Zhen:
Quote from @Juan Cristales:
Wow man! That is a tough deal to analyze when you don't have a lot of experience. I'm in the Texas market and also don't know anything about that market. Here's a couple of points I would bring up.
1. In a scenario where value is a bit unsubstantiated like this, I will pay an appraiser to give me a genuine valuation of what the product would sell for at market. They would need to know what the end product is going to look like to give it a solid number. That's the base-line.
2. Once plans have been stamped by the city, I do my best to not alter them as it costs time and money. The good thing is that you haven't actually started construction. Create the plan and stick to it, is my suggestion once you're committed. Also, once you start, you have to find a way to finish this project. You stand to lose less (if it ends up not being profitable) by finishing it THAN BY trying to sell a half-built product (where you are most likely going to lose more).
3. There are builders who do a "Cost Plus 15%" in most areas. My challenge with those guys is that interests are sometimes NOT aligned. This means that a GC is going to pass the cost on to you plus his fee without regard to seeing if he can source labor/material at a better price. He has limited incentive for that.
4. Build to Rent I think is great but just as @Stuart Udis mentioned, you would likely need more doors to make that profitable. In Texas, the model working well for smaller investors are duplexes. Two doors. One structure. I've personally built SFR rentals and the DSCR loan made it a "not so great scenario" for me. Even with the built in equity, the rent rate was insufficient to cover all or a majority of my construction costs and now I have a ton of cash tied up in those deals and the cashflow doesn't justify it. Lesson learned but I couldn't take the Loss.
Let me know what you decide.
Building new is something I wish I had started sooner. I prefer it more than flipping houses. House flipping just comes with so many "variables" that even the most experienced flipper can sometimes not anticipate. You have to buy SO Deep that the offers sometimes become insulting to sellers and it can be a very frustrating endeavor.
Best of luck!
Juan-
Thank you Juan! I'll definitely get an appraisal to see how I could work around the numbers. Cost Plus 15% GC is really hard to find in our area I've outreach to something like 30+ reputable GCs around the area but no luck.
Take it in smaller bite-sized chunks if you can. Categorize the construction costs on a spreadsheet and start assign it numbers. Share with the group here and as a collective, we can probably tell you what you're missing.