All Forum Posts by: Ed O.

I do build to rents. A few for myself and a bunch for investors. I've only done SFRs to date, perhaps it's driven by the market I'm in. What are you wanting to know about them? 

Home warranties, like many things sold with fear marketing, are bad for the consumers. The commissions paid on them, to the "good natured" salespeople / realtors, etc. are juicy. They're an awful product. I had one provided to me a few years ago. I didn't know I was getting it, until the day of the close and it was too late to ask for a seller credit in lieu of it. Low and behold, the AC died. I thought, ok, free AC? 

Not so fast. The contractors that work for the home warranty companies aren't paid too well, so as a result, they add fluff charges and inflate costs, which the home warranty company does not pay, which gets passed on the the homeowner. 

The warranty cost: about $500. 

My cost for a new AC was about $1500 at the time. 

I had to pay $300 for the permit, a fee for refrigerant recovery, and a few other junk add ons. I ended up paying around $700 in additional fees, most of which were total garbage. 

So, between the $500 for the "warranty" and the $700 in fees, I "saved" $300. 

I've heard of other horror stories with them too, which I won't go into here, but all I can say is the vendors took complete advantage of homeowners that simply didn't know any better. This was their profit center. 

These costs over more units show that it just doesn't work out over time and there's a reason they advertise them so aggressively. 

Depends on what you're after. 

Virtual mailrooms offer some neat features, they process your mail, can be set up far, far away, etc. I used mailboxforwarding.com and found them to be very reliable for the 6-8 years I've worked with them. Cost - about $15/month.. goes up per piece of mail after a set amount. 

UPS store boxes are great. They can take delivery for anything and keep it safe from the porch pirates. They also offer other services which you'll probably need at some time - notary, copies, etc. 

USPS (PO Box) Boxes work pretty good too. They won't take fed ex or ups shipments. If you have large packages shipped there, it's often a pain to get them - it involves getting in the long line and waiting for the usually miserable clerks to work through it. Most can be accessed 24 hours. 

Costs are all pretty similar... UPS is the most, virtual in the middle and PO boxes the cheapest. If you go with a PO box, I'd suggest getting a medium to large size one. I got a small one and wish I'd gotten a larger one when signing up. I get a lot more mail and a larger box at this point would mean changing po boxes. 

Not sure about your area, but if you can get a burn permit, it would expedite the process and minimize costs. Best bet is to find out the city's minimum lot requirements and see how many lots your parcel could yield. With this info, you'll know what the end product would be worth and be able to make the call as to do more work, take the offer or try for more. 

Hello Stephen!

I had some rentals on the MO side of the river and pondered growth to the Illinois side. I drove across the river a few times and looked at some houses.... after a few trips (and a lot of hours), I pondered why it made sense to look so far away from my target area. In hindsight, I'm grateful I did not make the move into Illinois. The efficiency lost by spreading out wide and far geographically wouldn't have worked for me.

What makes you want to expand geographically so far beyond where you're at? 

Don't get me wrong - I'm not trying to be a dream crusher.... perhaps there's a good fit for you where there wasn't one for me! 

Best of luck!

Thanks a lot @John Hyre for this great info! Lots to work with here!

Lee Smith is legit. It's a shame he can't get a plug in for his business. I've  known and worked with a lot of property managers - he is one of very few who I would ever chose to work with. 

Hey Russie - I pay for a pro membership. 

You're a class act, putting words in my mouth for me. Keep it up, I wish you were in my market so I could work with you.. I bet you're a great moderator. 

I've been a pro member for 3? maybe 4 years.... 

Recently, I've received an onslaught of BP solicitations. 

The first one, was a message from Mindy Jensen. Not knowing this person, I checked it. It was a sad, shameless pitch, trying to sell me 8 real estate  forms for people my state. I found this awful attempt at guerrilla marketing disgusting, but simply deleted the email. 

A day or two later, I get another message, asking if I have "left for good." Again from Mindy - you know, the same person trying to sell me a newb kit of forms for $200. I ignored it. 

Then a day or two later, another annoying message, titled, "the break up." 

Really BP - why? Are you that hard up for revenue that you need to send private messages, to get people to look at an advertisement for forms you're selling that I haven't needed in decades? Heck, I think I have even given forms like this to the community - and now, you're trying to sell them to me? I wonder if you're trying to sell me the forms I gave to the community? 

Did the BP ownership change? This disappointing approach seems like something which wouldn't happen under Josh's watch.

I have nothing against anyone wishing to generate income. However, to do it like this is pretty sad and certainly not in the high standard in which I've known BP. 

The guide mentioned above is pretty good. 

For me, here's the process out of the gate, which it sounds like is as foreign to you as it was to me. I have done years and years of rehabs before building.

Select lot, review covenants to make sure the house you want to put there is ok with them. Consider that the lot will dictate many feautes about your home, basement, walkout basement, crawl, driveway slope, etc. Consider setbacks (from the property line), etc as they will control how wide and deep the house may be and how it will sit on the lot. Garage and driveway always goes on the high side of the lot. 

Meet with and get a bank lined up, they'll eventually need a budget and order a preconstruction appraisal. 

Once you have the lot under contract, it would be good to meet with a home designer. In some areas, it must be an architect. In some areas, it can be a draftsman, which do mostly the same thing for a fraction of the price. You'll want to meet with that person and be able to show them a copy of the plat for the lot and the neighborhood covenants. When meeting with them, they'll want to know a sq footage number, bed/baths, garages, details and features you want in the plan, etc. They'll send you a rough draft of a plan, and you can tell them what you want changed on it until you arrive at a finished product. 

You'll want to line up an excavator, surveyor, foundation company and framer before you close, so you can proceed quickly if you wish to after you close the loan. Many trades work well with the trades before and after them, so if you find one sub that sounds legit that you want to work with, they can likely refer you to like minded subs that will do like quality work - who **most importantly will work well and play nice with other subs**. 

You'll also want to line upcharge/billing accounts with a few concrete companies and lumber companies and most vendors you expect to buy from. Easiest before you need the materials, etc. 

Then you close. 

1.  Call excavator & foundation company, tell him you're almost ready and to hold some time for you. Get a commitment. 

2. Call the surveyor - get a site plan and tell him you're ready. He will go out and stake the lot for the digger. 

3. Pull a new construction permit - this process is regionally specific and varies. 

4. digger should call in a locate and do their job. 

5. surveyor may return to stake the foundation for the foundation crew

6. foundation goes in. 

7. order curb cut

8. waterproof the foundation if desired.

9. run underground utilities

10. backfill the foundation consistent with the manner for your area, backfill utility trenches, pop the curb (while the heavy equipment is there). 

from here, you can start framing. 

The best tip I can offer, is to always keep your subs informed. Update them weekly - so they know the status of your job and commit to showing up close to when you're ready. Anyone more than a week behind - almost always goes many weeks behind, so look to bring in someone else when subs stall - which happens a lot. 

I may have missed a detail here or there, but this is a pretty solid version of how it's done in my area. 

Good luck