All Forum Posts by: John Blackman

Google Voice is great for a business number.

https://www.google.com/voice/?setup=1#setup/

I just completed my new home build start to finish thread here:

http://www.biggerpockets.com/forums/44/topics/136268-new-home-build-end-to-end?page=1

Selling a house for $110,000 at 1300 sqft is $84/sqft not including land, designs, engineering, or transaction costs.  You would have to build for something like $60/sqft to turn any profit assuming your land is very inexpensive (less than $10,000 for the lot).

Texas is relatively inexpensive to build in, and homes that inexpensive require big builders with great economies of scale to build that inexpensively.

Add up all of your costs and add at least 20%.  If you cannot reach a sales price that high, I wouldn't do it.

In summary:

Listing Price: $300,000

# Bedrooms: 3

#Baths: 2

Square footage: 1505

Cost to Build: $165,500*

*This doesn't include lot price, interest carry, or closing costs.

Time frame start to finish: 22 weeks to build, permitting time was exceptionally long due to changing flood maps.  We had the lot under contract for 6 months, but that is unusual.  We got a really good price on it though.  Sales time was 44 days on top of the build time.

Our normal turn around time is as follows:

1 month - Purchasing the land

3 months - Design, engineer, and permit

5-6 months - Build

1-2 months - Sell

So I thought I would post my project checklist for this one.  It's pretty much the same for all projects.  The formatting doesn't come across perfectly, but you can copy paste and format to your liking.  Just follow the list:

Lot Acquisition
How big is the lot (sqft)
Max FAR (sqft)
Max impervious coverage (sqft)
Flood plain information request form complete
Property Zone (SF3?)
Title is clear (no liens)
Check CC&Rs
Check Plat
Check utility easements
Close on Property
Survey complete
Topo
Trees
Setback
Title
Build size
Build price/sqft estimated
Cost to Build

Business Prep
Get permission letters from owners
Lender selected
Borrowers submitted bank paperwork
Borrower A
Borrower B
Submit budget to bank
Builder's Risk Insurance purchased
Builder's Contract signed
W-9 from everyone you will write a check to
Project Schedule is complete
Tax certificate in hand for property

Build Prep
Detailed architect plans complete
Soils analysis
Structural engineering complete
Room for HVAC
Fits within setbacks
No tree issues
Complete design and spec sheet
Cabinet dimensons complete and signed off
Plans submitted to bidders for budget
Budget Created and signed off
Post signage
Plans submitted to the City
Plans approved by the city
Set up Escrow account with the permit office

Demo
Order gas lines pulled
Order electricity disconnect
Disconnect water
Demo Structure

Build
Clear lot
Fence off trees
Power Pole in place (inspection)
Port-a-potty in place
Form Survey Complete
Pinpoint the lot
Foundation (3rd party inspection)
Framing (3rd party + City inspection)
Windows
Siding
Roof
Electrical (3rd party + City inspection)
Plumbing (3rd party + City inspection)
HVAC (3rd party + City inspection)
Get the BTU Load for the house
Insulation (inspection)
Pre Sheetrock ready (Elec, HVAC, Plumb all sign off)
Sheetrock (3rd party inspection)
Exterior Paint
Interior Paint
Cabinets and Vanities
Plumbing Fixtures (inspection)
Electrical Fixtures (inspection)
Trim
Mirrors
Countertops
Floors
Lawn
Landscaping
Fence
Driveway
Establish electrical service

Sale
Builder is complete - Rough Clean done
QC creates punch list
Call for CO
Builder completes punch list CO + QC
Final Clean
CO Issued
Establish gas service
Staging
Landscaping contract
Get photos taken
List on MLS

Partner with someone who has good credit.  Pay them for it.  Be the promoter.

That's the spirit! Go listen to this podcast for some motivation:

http://www.biggerpockets.com/renewsblog/2014/08/07/bp-podcast-082-deals-david-krulac/

Lots of folks are here to help you.

When you get credit inquiries there is a certain grace period while you're shopping.  It will have a minor ding on your score, but as long as you finish shopping inside 30 days, your credit should recover in a few months.  YMMV.

When we were establishing our banking relationships and dating banks (at least 1-2 a month for a year), my credit probably dropped by about 40-50 points.  In the year afterward, it came back up to where it was before that.

I tend to open my accounts with whomever is giving me a loan, so we use many banks.  I keep track of them all with One Note.

The common theme of low inventory makes it a great time to be building in Texas too.  So if you can't find a deal, build one!

Time and peace of mind are worth a lot in my opinion.  If you can get out of it with the equity you put in, maybe it's time to find a better property.  It sounds like the neighborhood is difficult to keep tenants in.

I would double down on proper screening for tenants.  That can make all of the difference.  Have you talked with a local realtor who knows the rental market in that neighborhood?  Is your situation common or are there stable properties nearby?  Try to determine if it's bad screening or really a bad neighborhood.

The answers for that are going to vary wildly.  In my case, I have not purchased buy and hold property, although I do have one subject-to property that performs like that.  But my business is very active.

I would simply start one at a time.  Learn a lot from your first rental and decide how you would buy your next based on your first purchase.  There is a ton of great advice on how to buy rentals on Bigger Pockets.  Once your rental income matches your job income you have the choice of ditching the job.  It can take several years, but they seem to go by faster nowadays.