All Forum Posts by: John Blackman

WEEK 8

This is the mechanical inspection week.  If we get lucky we might be able to start insulation at the end of the week.

Completed this week

• Roof completed
• Exterior paint 95% complete
• 3rd party inspector came out on Friday
• Soffits installed
• Draw issued

WEEK 7

Most mechanicals completed this week.  Now we start 3rd party inspections and framing inspections happen next week.  Here's what got done this week.

• Draw issued
• Completed HVAC
• Plumbing complete
• Exterior paint 80% complete
• Electrical started

At this point we're feeling pretty good.  In less than two months you've got what looks like a house and most of the guts done.  From here out the construction feels like it takes longer simply because the remaining tasks are time intensive and don't have the visual impact that framing and siding do.

Comps are your best bet to determine what you are going to exit for.  Are there other new construction duplexes in the area you are building?  Are they sold to investor owners or as condo regimes?  That can have a big impact on your exit pricing.  Are you buying to sell or buying to keep?

Like @Kenneth Bell said, you can also get an appraisal and if you are using construction financing through a bank, the bank is likely going to order one based on your plans anyway.

Thanks @Account Closed 

I am testing out 4 new book keepers right now and hopefully one of them will come through.  So far I haven't found one that can do the job adequately, but I've got one of the 4 that looks like they may work out.  Some aspects of the work can certainly be done remotely, but I think we will need someone in Austin eventually.

I prefer to pay for value where I can.  I don't care if you cost $50/hr or $25/hr, but I expect both providers to cost the same to accomplish the job.  One should just do it faster.

WEEK 6

1. Termite treatment on the foundation completed
2. Siding completed. This was all lap band hardiplank and some board/baton, nothing fancy.
3. The HVAC install started
4. The interior plumbing started
5. Paint prep on the exterior started since the siding is done
6. We issued our 3rd draw request

This was a great progress week. There were no blockers and a lot got done. You can see that the yard needs a bit of clean up from all of the framing and siding work. We also need to add decks to the rear side of the house. That big tree is also going to need to be trimmed to prevent large overhanging branches from falling on the roof or damaing the roof tiles.

Forgot to mention, you may need multiple attorney types.  Sometimes your RE attorney isn't the best for business formation, or taxes.

If you end up doing an offering, you will need a separate SEC attorney as well.

Just be glad that your rules are consistent. We deal with the City of Austin constantly and the rules change from day to day.  It's completely random and what may have been standard process one day is not the next and then it goes back to the old process again.  Depending on the personality of the person reviewing your file also determines whether or not your plans will qualify or need to go to City committee (read your project will be on hold for 6+ months if this happens).

It's just part of the business, and I look on the bright side that it keeps competition out, but it is extremely destabilizing. Keeping on their good side is extremely important.  If you plan to ever be in that office again, they can make your life hell if you have scorned them.  I would advise to grin and bear it.

Just work in the costs of using licensed contractors into your financial models.

You are likely going to go through a few attorneys and get some charges you don't agree with.  Our group has been through half a dozen to find the ones we like.  We've had some that bill us attorney rates for administrative tasks, a definite bad sign.

It's also a volume game.  Our real estate attorney also can do closings which we do several through his office.  This will effectively garner you some good will and keep you from getting those $100 invoices for 5 minute phone calls that so many other attorneys send.

I would double down on the recommendation to network and start to get to know similar types of investors in your area.  Most will be quick to call out preferred vendors.

Subject-to deals can be tricky.  In Texas we use special title companies that are familiar with them and performs all of the necessary disclosure to make sure they are legit.  Check your states laws.  These can be very lucrative without a lot of capital or any required.  Just make sure you can carry the note if you don't get a renter or buyer, otherwise you will be wrecking the sellers credit if you can't perform.  That is the worst thing about those deals where people buy them and can't sell them fast enough.

I only own one subject-to property but it does have great returns.  They are very time intensive up front but pay off well once stabilized.  Good luck..

So in your opinion is there no utility in bucketing your properties?

And let me be clear, I did not mean to suggest doing this in lieu of an insurance policy.