All Forum Posts by: John Timmerman

Need a fixed/set construction cost figure; otherwise, there is little incentive to manage costs and he can submit whatever he wants for his employees' time.  Ask me how I know...

If he did not bring the deal or any capital, seems like he should be a contractor rather than an owner. 

I agree. This is a red flag. Even if you had a fixed cost for his labor up front, are you getting paid a fix cost for your time locating the deal, completing all the lending paperwork and getting it up and running? If not, it's not equal. Plus this creates an unintended consequence of him potentially dragging out the time and cost and adding things to the list. I would be wary of this personally.

What am lost on is what value is he bringing to you and how much is that value worth in dollars? He is saving you from larger upfront costs but how being paid out of cash flow. I assume you already accounted for reserves? How are you managing his construction costs? Does the partnership end after he is fully paid back + interest?

Need a fixed/set construction cost figure; otherwise, there is little incentive to manage costs and he can submit whatever he wants for his employees' time.  Ask me how I know...

If he did not bring the deal or any capital, seems like he should be a contractor rather than an owner.

Agreed with the above - why not just rearrange the cash split so that he has to put money down with you and that way he's "invested" from the start? On the other hand -  if you weren't including his/his people's time as part of the rehab number maybe that wasn't the true number? Also Its not completely out of reason for him to charge time however if you're putting up more of the funds I'd be asking for a steep discount. Good luck!

Doesn't sound like a deal to me. He has incredibly little skin in the game. He can walk away at any time with fairly minimal sunk costs.

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I'm with - you're not ready to be buying these properties. Unless you're an eccentric billionaire. I think there have been several responses so far on this thread that question all your numbers. 400-800k range and wanting to "just pick a number". You need to hit the breaks. Hard.

I think others have already commented on some of the items, but one thing I noticed - you keep calling these cash flowing properties. They MAY be cash flowing for the current owner (who doesn't have financing cost that you will have) but that doesn't mean they'll cash flow for you.

You're here for BP advice - here it is: Know your numbers. If you were on Shark Tank, they would kick you out. Advice and help isn't always going to make you feel good. Reality hits hard.

This may end up being a nice opportunity but based on the information on in your posts you have no idea if it is or not. And for that reason - I'm out.

Thanks for the insight.

I have to say, The barrage of people telling me I don’t know what I’m doing wasn’t what I expected when joining Bigger Pockets to “ask questions about what to do” 🤔 .

I don’t need to be told that I don’t know what I’m doing. It’s exactly the reason I’m here lol.

Thanks to the 2-3 people who are helping 🙏 @Matthew Irish-Jones being one of them

People keep saying you don't know what your doing in an effort to help protect you from a setup for failure. They should be following up with clarification (and i believe are not out of assumption that it's just known common sense in this field) that as you don't know what your doing, you NEED and should be HIRING your weakness, hiring someone who DOES know what they are doing. An REI Acquisition Consultant to advise you, to analyze the deal.

It does not seem like your open to the advice and direction in an open honest manner, just seeking affirmations of what pre-decided to hear. I get that sense. 

@James Hamling I’m VERY open to constructive criticism and advice. I am not an expert here. I know that I do not have any of the answers. I am here to get advice.

but I am Not open to criticism with out advice. The world already dishes out enough of that. 

A few people have given me great advice, and I’m grateful for that. I did listen, and it’s helping. So thank you. 

Fair enough point, and in foundation I rather agree as I find frustration with those who only add negative without at least providing a positive to balance. 
Although, I believe the fault was with assumptions and expectations, not respondents responses. 

You pointed out John that you don't really know things and came here, into this arena, expectation to be provided answers and solutions. This is not that, this is a forum of open discussion, comment and dialogue, not a Help Desk for Real Estate woes. 
Yes, at times it really is a fine line but in end I believe intent really defines where that line is. Your intent was not for discourse but specific answers for actions to be taken, that is Help Desk. 
And remember, you don't really know anybody on here. For all you know the advice you take and act upon, could have come from a 12yr old who has painted himself a 57yr old landlord from Trachoma. 
Point is this is not a Help Desk, it is a forum of open discourse and one must expect it as such, including not receiving the advice expected in the manner expected, to just receive opinion. 

Seller wants a price that puts the properties way under the 1% rule, in a state with high property taxes. No way you give near that amount.