All Forum Posts by: Davon Lowery

Hi, I'm a real estate attorney in California. This thread disturbs me and gives me hope. Clearly there are some people who talk about legal questions with some familiarity, while others are FOS. @Jameson Sullivan your initial question didnt even explain why youre forming an LLC, how complicated your situation is, how much you own in terms of personal assets and other business assets that need to be protected, what are your source of funds, how much legal guidance you need in operating your real estate business,... These are important considerations in forming an entity and whether you are able to do it on your own or should have some professional guidance. It makes no sense to spend money on a website created LLC if you dont really understand how you have to operate your business, set up your banking, write your contracts, interact with vendors, to avoid breaching the LLC veil. A good attorney will explain how you operate your business as part of the LLC package. It like having a caring mother who teaches you how to operate in the world, then pushes you out of the nest.
The person who said insurance is a replacement for an LLC doesnt really understand all the pieces. That's like saying "I removed the windshield, doors and bumper from my car because I got a good insurance policy." The point is that they protect you in different ways. Insurance doesnt keep you from getting bugs in your teeth, and a windshield doesnt pay the bill if you have an accident. But you need them both.

Likewise, insurance doesnt protect and partition off your personal assets if someone is injured on your property. And and LLC doesnt pay for insured loses.

Personally, I think that getting the cheapest LLC formation is a waste of money. If you havent had the whole thing explained to you, hire a good lawyer. Its much cheaper to spend one or two thousand dollars now, then 10 or 20 thousand or more defending a lawsuit.

Jen

I've read that if you are getting tons of low quality applicants, it is likely that your rent may be priced too low. If you bumped up the rent a little bit you may get less inquiries, but could possibly attract some more reasonable minded tenants. That was the first thing that came to mind when I read your post. Good luck!

@Davon Lowery - You might want to search for "repiping specialists" instead of using a traditional plumber.  My primary residence home had multiple slab leaks, so we decided to moves pipes into the ceiling instead.  I called traditional plumbers and their rates were astronomical and primarily focused on copper plumbing which we had problems with.  As an alternative, I found repiping specialists on Yelp that use PEX piping.  They were easily the lowest cost and fastest:

- $5,500 for 2000 sq. foot home in Orange County while plumbers were asking $7,000 - $9,000 for the same project
- 1 day to replace all the plumbing and get the hot water started plus 3 days to patch all of the holes created.
- Our contractor provided a lifetime warranty on parts & labor.  For a flip, that may not be needed, but as a homeowner it provided peace of mind.  We found one minor issue a week after installation, and they came out and resolved immediately.

Good luck!

Check out majestik construction Corey.fritz. Hit me up for the contact info cuz I can't put it here. I had a really great meeting with him seems to be on the same page as far as materials and line item bids. He's doing a bid for me now. Looks like decent set up with in house workers instead of sub contractors. Let me know what you think.

we are fliiping in mke now as well and what J scott said is true, so dont expect it to get any easier. Finding contractors has taken twice as long as we expected and the difference between the bids is astronomical. Go to the house for a day line up 10 different contractors to look at the same scope for different things. It was the only way we found people and much better than trying to convince someone to take 40% of their estimate...

Just as another idea for you.  I have been in the bathroom and kitchen remodeling business for many years until I started doing re-habs for myself.  I have always used two different plumbing contractors and the same electrical contractor.  I save tons of money by doing all of the demo work for them and assist as they are doing their thing.  I cut the concrete out, move and bore studs, etc.  I am flexible with their schedule and when I call them in at their convenience they know all is ready to go and I even clean up for them.  I have a small team who does my carpentry, tile floors and I do the bathrooms and kitchens.  I use small contractors who like my method because they can work around my schedule and they know they are in an out quickly with no obstructions in their way.  I always deal with the same people also so we have a good relationship instead of different tradesmen coming in.  Most of the time when I have a project they scope it out and tell me what they want done before they get there.  All the best to you in your venture.

@Davon Lowery

PEX is for supply lines and doesn't require any glue like PVC. Even with PEX your going to have barbed copper lines where the supply lines exit the walls for fittings, angle stops, etc.

PEX is amazing stuff. It can flex around corners, be pulled thru penetrations like wiring can, will swell without bursting in mild freeze situations (unlike PVC and copper).

Best of all, it's cheaper then copper and much faster to install which should result in a savings on the labor at least.

Give it a Google!

What exactly needs to be done? Is there existing plumbing? Is it sewer work, water lines, sinks, toliets, etc. Is there anything you can do yourself to cut costs - remove old water tank, deliver new one - take out old toliet, break out walls to give plumber access to pipe channels, etc., etc.?

I noticed you asked the plumber to bring in his costs to $6k and you are basically telling him he has a guarantee of steady work with you, if he does cut costs. How can you prove this to him - do you have other places already under contract or in your portfolio?

Can you obtain permits and handle inspection yourself? This I usually set up with my plumber. I use his paperwork fill out all the info, take a check to the Building Inspections Office and when the plumber is complete, I order the inspection and basically serve as the plumbers assistant when getting the job inspected. Depending on where you are @ this could save anywhere from $500 to $1500 on costs.

I basically do the same with the electrician, but because I am an electrician, unlicensed, I can do a lot of the work myself - he gets paid to pull the permit and do the inspection. So if you want a great rapport with your contractors - try asking less of them and more of yourself. But this isn't to say, you want more work put on you and you expect less quality - it is just saying where you can do little things to cut your costs do em.

And what is wrong with pex, anyhow? Just asking?