All Forum Posts by: Frank Geiger

Sorry to burst your bubble but this is a very common strategy. A house hack with student rentals. Then move every year to secure cheap financing. It works and if you listen to the podcast this is how a lot of successful investors get started 

Get good at evaluating deals and estimating rehab costs. Wholesalers just waste everyone’s time with bad deals. When the contractor bids 100k but the wholesaler said 40k, it never works out. So save us some time and don’t even mail the deals where the numbers don’t make sense

Few things to point out here: 

You are going from providing a service to being a partner. Since he is footing the bill, he has all the risk in the project. He is trying to get your work cheaper by providing plenty of homes to rehab. 

With that being said, two projects in any 6-8 week period is a great deal of work. Sounds like you would have to expand your business to accommodate this request based on the details above. I would see this as an opportunity. You can counter at a reasonable percentage of the profits. You do add value! Don’t let anyone say you don’t! It’s hard to find good, trustworthy contractors. Write up a contract that details the involvement of the investor. Clearly defined responsibilities typically clear these miscommunications up. 

Question is do you want more work? If this were me, I would figure out how to earn Larry’s business.

Mandi,

Did you give him all the rehab money? You can fire him and get a new one.

Unfortunately, contractors are bad with timelines. They are providing you a "service". If you emplace a restriction on them by not staying on timeline, they would rather walk away then pay. A reputable GC will not be willing to tarnish their reputation but they will cost more.

Next time you can try making a good contractor a partner. In the agreement, you pay for the house, he takes care of the rehab, then you split the profit. This is a good way to build trust.

Try not to stress. Its unhealthy and whats done is done. You can only move forward. Best of luck.

The Seller is trying to get top dollar for a property that is not worth that amount. You ran the numbers and 250k was your top dollar. If you meet him at his price, your emotions are guiding you. If the numbers don't work, continue to submit the same offer until he gives up after 6 months. He loses money each month he doesn't sell.

As for the conversation, its hard to tell if it was constructive or just an argument. Depending on the situation, I think what you did could be good or bad. Some old landlords need realism brought into their lives. Some have spend years taking care of their property and have an emotional attachment to it; making them believe its worth more. 

@Dawn Burwell the regret was it took longer to scale and save up another down payment

Wow! That would not fly in the US. Leeches man

Look into how much it costs to get a RE license. Confused why you would get it if you're about to leave the state.

Also, building a network of investors and good recommendations takes time. 

Kevin,

You sound like a busy man. Looks like you will have to start losing some sleep soon to find time. Account for all free time throughout the day and cut down on the relax time (but don't kick it because that's important too). What do you do for lunch? I sit in my truck and look at properties and network with PM, contractors, realtors, etc. I do not have kids but work long hours so I can somewhat relate. 

Spend a lot of time learning and saving cash up front. The next big hurdle will be calling everyone and trying to find the rockstars. 

I agree with @Nick C. not worth the hassle over one day. Let them move out on good terms and not risk having damage done to the property