All Forum Posts by: Gordon D.

I meant to say that the "market values are considerably higher"

Michael,

I saw that property and I'm familiar with the area.  Will is correct in that you'd have at least $150K in rehab costs.  I also think the suggested ARV of $229K is a bit high.  If it were further up a few blocks, the market values are considering higher.

If your original ARV is reasonably close it looks like you just paid too much for the property initially. It sounds like you educated yourself, prepared your estimate of repairs and executed well. Judging by the before and after photos it looks like you did a nice job. Another area that may have contributed to the smaller margin is contractor costs. Contractor costs may have been higher the you thought as well. Just a few thoughts.

Theo - I have over 30 years worth of experience building custom homes and I can tell you with confidence that you will not save money being your own GC.  Why?

1. Lot's of reasons, not the least of which is the lack of knowledge and experience.  Here are a few other things to consider.  
2. One of the most important aspects of such a project is the budget.  How will you prepare a budget without knowing what's involved?
3. The preliminary work alone will take longer than you think.  Site planning, zoning, permits, engineering, etc.
4. In general, there at a bare minimum over 5000 details in the building of a home.
5. Your GC has the experience of what products are available and what will work best for your project.
6. General Contractor's can buy products and materials at discounts that you can't.  Just that fact alone can be reason enough to work with a professional GC.  What you think you'll save, you will spend in purchasing.

Find an honest, reputable builder that will work hand and hand with you and in the end, you'll be a happy man.

Luke 14:28  For which of you, desiring to build a tower, does not first sit down and count the cost, whether he has enough to complete it?

Great post!  I have a question about the promissory note and a deed of trust that you provided to your investors.  Since there were four investors, how do you structure the deed of trust so that they are all protected?

I'm currently looking at a number of properties for both rehabbing and rentals.  Besides my own cash, I have a home with no mortgage so this may work for our company as well.

Thanks for the input, Bill.  

I suggested assigning the AOS as well but I think he's concerned that the current Owner will not sell it when they see that he's making a profit above what they're selling it to him for.

The offer to him is a consideration because it was his mother's house and is adjacent to his current residence.

In the event that we go this route, how would you suggest we write the assignment?

I have an opportunity to purchase a property well under market value but want to get some ideas as to how best to handle it.

One of my sub-contractors lost the bid on a tax sale property that was owned by one of his family members.  He has a $30,000 lien on the property but he won't ever see that money unless or until the current owner sells the property.

He has offered to purchase the property from the current owner for twice what they paid and because it was a "family-owned" property, the current owner has agreed to sell it to him, but him only at this price.

My contact, the subcontractor isn't really in a position to buy the property and hold it but is interested in getting his $30,000 back so subsequently he has offered to sell me the property at a price we'll under market value to accomplish this.

If he buys it and closes he'll have the usual fees, taxes, etc. and then he'll immediately sell it me and we'll have the same associated costs again.

How would you structure this deal to avoid all of the duplicate fees, etc.