All Forum Posts by: David Roe

Strategy; Owning a Home Remodeling Company to do your own flips

I am finishing house number 2 for the year but this is my 3rd house and 4th investment property. I have done most of the work on most of my projects. My first house I bought was a repo and it was a total gut job and I did most of it. Military service = Power Pro (Bare Base power Plant/Electrical) and AGE Aerospace Ground Equipment Mechanic. I can do Gas/Diesel Engines, Turbine Engines, HVAC, Hydraulics, Air Compressors, light carts, Air Craft arresting systems… and more… I am currently a Program Manager on a 30Million contract on base and know how to manage programs, people, and money. I have no interest in doing the manual labor any more. My current strategy is to buy and hold, I have two AirBNB rentals and a traditional 12 month rental. Currently doing the BRRRR strategy but I am willing to do a BRRRR where I break even and not profit but get a free rental. (
Long Term Gain)

My Question here is that I have hired a few contractors and they all seem to suck in the end in some form or fashion. Paying top dollar for the labor of course cuts into the type of houses I want to do. So I have started to look into just buying an existing Contracting/Home Remolding company. I found one that Grosses 650k with a 75k cash flow. My plan would be to purchase this one or a different one and use them to do my rehabs (3-4 a year) along with the current work the company already does each year. With that said I may have to hire another worker but I am curious if any of you already do this. How your Investment Company pays the Rehab Company and tax implications involved with doing so Especially with Flips and capital gains. I mostly want to do this only for my rehabs but buying a company already profitable makes since to keep the employees Employed while not completing a flip/rehab… But also would have a team I know will do it right and not break the bank.

What are some things I should consider, look for, think about etc…

Dave Roe

Education is Key, read read read.... Also BP pod cast is a great tool also.  Save all your money while you're learning, once you think you're ready post what you plan to do on here and people will chime in on any red flags you may post and give you pointers.   

Books i Like:

Third Circle Therory, Quit Like a Millionair, Rich Dad Poor Dad, Cash Flow Quadrant, Richest Man in Babylon, Then all of the Bigger Pockets Real Estate books, Never Split the difference 

Dave-

Ok thanks 

If i had a rental house already rented and making money in my name or an LLC bla bla bla... Can i have my Self Dirrected IRA purchace that rental house from myself and avoid capitalgains and let the IRA have it till i retire? Yes i know you make nothing on rent while its in the IRA. But can i close on it and collect the sale price CG free yet still own it in the IRA?

Thank You in advance 

Dave-

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $42,800
Cash invested: $59,000
Sale price: $105,000

Couldn't be happier with this house, it's rented out for $950 a month it appraised for $105,000 and I only had $59,000 total into it. Did a BRRRR and pulled 79,000 refi out of it made a profit and now have a free rental...

What made you interested in investing in this type of deal?

I like money

How did you find this deal and how did you negotiate it?

It was on the MLS for a long time, they just wanted out of it.

How did you finance this deal?

Personal loan

How did you add value to the deal?

Rehabed the whole house

What was the outcome?

950 a month rent and appraised for $105k.

Lessons learned? Challenges?

First contractor I had to let go, just needed a better vetting process for who I hired

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

Jenifer Vogal from Irongate

I really like that Mashover site...  

I agree 100%, my comment was more so a joke/stab at the local policies that i feel are nuts, like mentioned before they wont allow Short term leases but allow drugs... LOL  Why not collect the revenue from any form of business coming to their City.  I hate when Government tries to mandate private industry.  

Where did you get your occupancy rate from?

So here's a legal question in terms of loopholes, what prevents someone from using a property as a short term rental and on the booking of the property and a12 month lease is signed with wording of "if the lease is broken early a daily rate will be prorated via X amount per day and can be broken for any reason".... Making the property an actual long term rental where basicly everyone just breaks the lease and gets charged a daily rate?   Anyone?   LOL  

Dayton is a great market, alomost any strategy will work here.