All Forum Posts by: Jacob Evans

I agree with Tim. 

Also, in my experience, unless there is motivation to sell below retail, most home owners will not simply pass along substantial equity.

Due diligence starts with ARV (After Repair Value). Immediately get your hands on some good, unbiased comps and set up some kind arrangement moving forward that allows you to do this every time a potential deal pops up.

If you don't have the ability to get an ARV that you're 100% confident in, then you're wasting time and potentially a lot worse ($$$).

Put a win-win together with a realtor. Either pay for their mls access, create some kind of client relationship agreement, pay a flat fee for cma work or something of the kind. DO NOT rely solely on any comping service (zillow, county, etc) other than your local mls/TRUSTED realtor. 

My company pays a flat fee per cma and a $200 bonus if our cma experts arv is within 5k actual arv.

If it's truly a deal then funding buyers will generally take care of itself after solid sure diligence has been performed. 

Welcome Ryan. I've been a full time investor in Spokane County for 9 years. 

Feel free to hit me up if you ever feel the need. 

Later! 

Ok awesome Will. Do you know of anyone else who might be interested in the group? I'm excited to bounce ideas off of great minds and assist in any way I can. :-)

The idea of bringing major players like this together is exciting!

Will - Are you full time? I used 10 deals as an arbitrary bench mark to more easily determine whether or not someone is a full time investor who has moved from a real estate hobby to a real estate business with business systems and progressive growth and goals. It is very possible that someone is full time with larger projects and doing fewer deals. Donald Trump probably doesn't do more than 10 each year, for instance =P

Dell - I actually think it would be MORE beneficial that we're all in different parts of the country. It alleviates concerns over market competition and we can focus more on the similarities and differences of our business models, systems and strategies rather than discussions around specific markets, prices, climates, cultures, etc.

We have 3 members so far. I propose that we start when we've found a 4th and move to discussing our "meeting" objective/agenda/structure before discussing our media for communication (IE: group emails, telephone conference, skype, google video chat, etc)

Later we'll also need to discuss timelines (how long/wordy, etc) and frequency of meetings as well as defining the type of commitment we'll all have to each other and the group.

My suggestion for agenda/structure:

My current mastermind group uses the structure set in place by Jack Canfield in his book "The Success Principles".

It goes - initially each member has an entire meeting to familiarize all members with their real estate business, experience, positives, negatives, etc.

Each subsequent meeting all members have 15 minutes or 200 words or less or whatever we come up with, to cover topics like:

1. Commitment check (did you achieve your commitments made at the last meeting? Why or why not, etc?)

2. Wins (What's working in your real estate biz, life, etc since last meeting)

3. Rocks (What's not working, what do you need help with?)

4. Needs (What, if anything, do you need from the group?)

5. Discussion (Open dialogue for ideas/suggestions, etc)

6. Commitment to Stretch (what will you do before next meeting to stretch/grow your business?)

Just a suggestion, but it works well for my other group.

If you know of anyone else who you think would be a good addition to the group (we need 3 more solid investors) feel free to send them a link to this discussion. Preferably rehabbers/wholesalers.

Alright, so it took a while, but we have some interest. :-)

Obviously in person would be ideal, but efficiency and frequency would drop dramatically. I also think there is some value in being able to respond to big questions/ideas at a time of our leisure after consideration and possible research rather than in the moment.

Since proposing this topic I created a business/life related master mind group that meets biweekly. It's been hugely impact-full so I'd love to assist in creating one for real estate specifically.

The ideal master mind group size, from my experience is about 6 people. Personally I'd prefer masterminding with rehabbing/wholesaling specific members who do 10+ deals per year (full timers), as I don't have much experience or interest in any other niche at this moment. I'd also suggest that we meet (in some form) bi-weekly or monthly with possible semi-annual face to face meet ups to follow.

To start we'd need to agree on the specifics (timing, frequency, media, etc) and find 6 SOLID members.

What do you guys think?

Hey John, how did the course end up for you? Were you able to put a deal or two together with Chico's advice?

Ed doesn't have credit or assets.

Work for the next 30-60 days would be on my next few projects.

IF I opt for an "IOU" it will be with a very short leash stipulation and the IOU would come as a result of me paying for materials directly for this current job so he can finish up.

I'm finding that the more digging I do the more I realize how displeased my other colleagues are with Ed and how gloomy his situation truly is. Money still owed to Subs, other loans, other unfinished/behind projects, etc, etc. A $10,000 loan might not even bring him current with his current obligations, but I'm convinced (because it's really his only option at this point) that he is still very much interested in finishing my job to continue working with me for future income... Not saying that that's the route I plan to go, but I think it's a real option. I'll make my decision Wednesday Feb 27th and let you guys know.

Thanks so much for the input so far :-)

Good advice all. Thanks so much for the replies! This is really great!

It seems that the general consensus is that I fire him and find a better contractor. I can understand where that makes sense. I would however like to add a few more pieces of information to see if it changes how any of you feel.

This contractor and I have history and he has a history of being a very good contractor whose situation temporarily changed resulting in him getting behind financially. Four months ago he successfully assisted me in flipping a house. He has also successfully assisted other colleagues of mine in flipping four other houses in the last six months. He does great work, he has integrity and his prices can't be beat.

The reason he has fallen behind financially is because he got too big too fast. Demand for his services increased 10 fold once I started referring him out to my network. He accepted too many jobs, mismanaged his finances/employees on those jobs and got behind financially. We have since sat down to go over the dilemma and he has agreed that he doesn't currently have the capacity to take such risks in hiring unknown subs to help him with more work than he's capable of handling on his own. He got caught with his pants down when he hired subs to perform work at wholesale prices (not much room for error), and they didn't perform. Resulting in him taking cash from Peters new contract to finish Pauls contract, while hiring MORE subs to complete Peters work on time so he could also fix the mistakes done on Pauls job site. A little confusing I know. I was the one who assisted him in reflecting on the situation to determine that he was in a pattern that would ultimately collapse in on him. He realized that he needed to stop the cycle, own up to the fact that he could no longer afford to finish, instead of "borrowing/contracting" for another job to finish the last job...

It's no matter of laziness or fear that prevents me from firing this guy. As a full time investor for the last 7 years I'm VERY familiar with the hiring and firing of contractors process. It's not something I"m concerned with. The question for me is simply a matter of business. Does it make more financial sense to my business to fire him now or ride out this rough patch with him to get my current job completed and to solidify our loyalty/bond for future projects together now that he has a better grasp of how his business model is most effective?

I figure if I were to fire him today, another contractor will require at least $8,000 to finish up his project. The $8,000 overage would likely never be repaid by the current contractor and would come directly out of my profit margin on this project.

However, if I were to pay for materials on the current job to allow him to finish. Then role the total overage into a promissory note/contract and allow him to work off the debt while also requiring that he perform all of the work on this and future project himself to avoid this situation in the future, it might be a win-win for all involved. The win-win in this scenario is really what I'm looking for.

So, what do you think?

I purchased 3 W&W properties in early 2012 and all of my bids were accepted. It likely just depends on how much the highest bid was for and what the minimum the seller is willing to take.

If you get another one rejected I'd suggest trying to immediately negotiate through the W&W rep to see if they'll accept a slightly higher offer from you. W&W wants to sell the house so they get a commission, the seller obviously wants to liquidate and you're a potential buyer. Might as well try to work a deal.

My contractor mismanaged his employees and subs and got behind financially on his most recent project with me. He is concerned that he can't get the project done without a loan or "pay day advance on future projects".

He's requesting a loan of $5,000 to get our current job done. In exchange, he'll agree to make $1,000 payments on each subsequent rehab project until he has paid me my original $5,000 plus $1,000. He has offered to sign an additional $5,000 construction contract for the "loan" so we can use his $12,000 bond as leverage. I'm not sure how that'd work...

What do you suggest I do? I hate loaning money, but I also don't want to have to find a new GC to finish when I've already given the current contractor payment. The current contractor is willing to get it knocked out, it's just a matter of needing the extra funds to finish.

He has taken all of his draws on the current project and only has a remaining balance of $500, which is dwindling quickly because he's also 14 days beyond his deadline and $50 for each day beyond our deadline is being deducted from the balance owed ($500).