All Forum Posts by: Jackson Sandland

Why would a contractor ask if a property is my primary residence?

What are the differences between a consumer hiring a contractor to work on an investment property v/s a primary residence?

What are the implications, as far as my rights and protections as a consumer?

How do you classify inherited property that is not a primary residence?

@Brady Lamprecht Never ever pay for an estimate. You should be researching quality contractors. Choosing at the least 3. Vet them. Vet them again. Compare estimates. Also, know the laws governing the contract that the contractor would provide in your state, and ensure you have everything in place that should be in the contract as required by law. Make sure everything is explicitly clear as to what is expected. 

I own a large property in need of renovation in a high end ZIP code where typical building costs can exceed $300 / square foot. Crazy as it is, for this area, if you want the highest caliber work, like you would see in "Home Decor" magazine, the price can exceed $500 / square foot.

I have a property manager my family has worked with for almost 30 years who has lined up all the tenants, and would handle rent collection and managing the property. There is also low housing supply and high demand, which is great for keeping the rooms rented.

For the work I'm considering, I don't need to be in "Home Decor" magazine, I'm just looking for high quality work at a reasonable price.

I'd like to put on a new roof, update the electrical, plumbing, and decking to start. Beyond that it would be amazing to do updates including en suite bathrooms, the kitchen, the basement could be turned into another unit etc but those are ideas for when the initial renovations are completed.

My question is what are the strategies for not paying absurd prices for work that could be done with the same quality but for a fraction of the cost in more reasonable ZIP codes?

My first thought would be finding contractors who do great work in the midwest or any other area where the price is reasonable and fly them to where the property is located. The property is big enough that I can house contractors while they work so I wouldn't have to pay for hotel rooms.

What are possible issues I'm not considering here, and what are other strategies that I have not considered?

Thanks!

Jackson

@Shane Elias-Calles I would not pay $3600 for someone's course. In my experience those courses are offering the fundamentals you can find clearly outlined online, in books, and by reaching out to people. Experience is the best teacher. In the real world, even if someone is bringing you deal flow, they wouldn't ask for cash up front. They would expect a commission from the sale.

The reason these information products work so well is because of the majority held belief that getting "rich / successful" is an event. Becoming successful (whatever your definition may be) is not an event. It is a by product of your process. It just takes time and persistence. I learned about this in the Millionaire Fast Lane, which is a must read for any aspiring entrepreneur. 

I contacted a moving company to get a quote and they started the job without my permission. The job is for a property I am putting on the market.

I asked them to come to the property so they would know exactly what we wanted to move so they could provide an accurate quote. I have this in writing via email where I tell I the purpose of the "walk through" is to get an accurate quote. I called them about a week after the "walk through" and they told me the job was basically done. I never signed a contract, and I never put down a deposit. About 2 weeks after they said they were finished they sent a bill for $12,000. I've tried settling with the owner but he's unreachable. What are my rights? All of my property is in storage at their company. It must be illegal to do a job without permission and then send a bill no?

Thanks @Dave Foster :)

Interesting - but if we don't 1031 are we able to just sell the property, pay limited taxes since our basis is stepped up, and make decisions freely? Since we aren't renting the property I don't think it qualifies for 1031 at the moment regardless. I hadn't considered that the trust actually owns the property...

That's great to hear that limits don't exist. 

So, you're saying that when we sell we would only be taxed on the gains since we inherited - so that means the tax liability is likely to be small anyway? The property was put into a trust less than a year ago and my brother and I are the sole heirs as of this year - are you familiar with how that would affect this scenario?

J

I inherited a property with my brother - we're planning on selling and doing a 1031 but can we both 1031 individually? For example and for simplicity, say the property sells for $500,000 we will split the proceeds so we have $250,000 each. Can I take my $250,000 and use a 1031 to invest it in a property I will manage - and my brother takes his $250,000 and invests it in his own property? 

I've read there are limits on the number of properties you can invest in from a 1031 but I haven't verified that.

From what I've read the limit is 3 properties can be purchased via the proceeds from a 1031. If that is the case - could I invest in 3 properties and he invest in 3 properties - since we are both owners and both looking to 1031?

Thanks :)

It was used as a long term rental property in the past that was deemed commercial.

There is incredible high demand because of the lack of affordable housing. For example, beautifully renovated properties - decked out to the 9's - may rent for 40k / week. So, most people are catering to that market, and renovating their properties. This means renting a room to work for the summer is almost impossible. 

This property is not in that type of shape, but it is fine for housing employees and people there to work for the season. 

In the long run - it could be completely renovated and re-purposed into a legacy property or a mega cash flow property.

For the time being it fills a need in the market and doesn't need extensive renovation to be attractive.

Thanks for the ideas Spencer. Not able to "@" for some reason.