All Forum Posts by: Jeff V.

@Jerie Bowie

Typically you can see the vacant units and use that to figure what it would cost to renovate a typical unit and figure that into your offer price.

Once the offer is accepted, you absolutely have the right to inspect the occupied units with a 24 - 48 hour notice to the tenant during your due diligence period.  You can then re-negotiate the offer if there are more repairs required than expected.

Like a previous poster said, they don't want to disturb the tenants for every tire kicker that comes along.

Hope this helps.

Jeff V

@Joshua Matowitz

See similar post here.

Same applies.  Basically, holding company creates overhead and unless you have a fairly large operation, not worth the extra overhead to get started.  Build your foundation first and you can restructure later.

Jeff V

@Scott Jordan

Scott,

There is no standard... an LLC is very flexible in how it can be structured.

It boils down to whatever you and your partner's decide on payment structure.

It could be 50/50  down the board or 70/30 either way, whatever you and partner decide.

You could even take on a partner and offer them a preferred 12% return and split the remaining profits 50/50.

Literally whatever you and partner decide on.

You would want to draft up a rough letter of intent with all terms spelled out.  Take this to a competent attorney to run through all of the "What IF?" scenarios to form up your final Operating agreement.

Good Examples of "What IF" scenarios:

What if you get hit by a bus?  What happens to the business, how is it divided up or does it survive and go to your partner?

What happens if your partner gets hit by a bus?

What happens if you or partner end up in divorce?

What happens if you and partner can't come to an agreement on the direction of the company?

What are the roles and responsibilities of each partner?  What if a partner acts outside of those roles and what are the remedies?

You see how this can get complicated and an attorney and CPA should be consulted for advice on liability and tax strategies.

Hope this helps.

Jeff V

@Daniel Shahmoradian

Use the local resources, call a broker in the area and get some local referrals.  The brokers that also manage rentals, would be a good choice, because they work with contractors to repair rentals and those contractors are used to working with investors.  

Also, the broker may be able to oversee the project or have someone who can PM the project for you.

Either way, nothing to loose by calling.

Hope this helps.

Jeff V

@Robert Fornwalt

Robert,

I would suggest paying for the education on the first one.

For Example:

Hire a flooring contractor and see if you can negotiate a discount if you be his helper and assist in the project.  Even if you don't get a discount you will learn tips and tricks of the trade and it will get you to the finish line.  You will be able to see the entire project from beginning to end and on the next one you will be 100% sure that you can do the job or not based on this experience.

You will solve several problems in the process:

You will be sure that the job gets done correctly.

You will learn how to do the job yourself.

You may save some money on this job.

You will be more confident in your ability to do future jobs of so inclined.

You may decide that its more trouble than its worth trying to do this yourself when there are people who can do this quicker and more efficient than you and at a better quality for a fraction of the cost of the time it will take you to do it yourself.

Either way it will be a good learning experience and you will know exactly what it takes to get the job done and how much your willing to pay for said work.

Hope this helps.

Jeff V

Also, remember to as for referrals across trades.

For example when getting a quote from a carpenter ask who he likes to work with that does hvac or electric work.  Or ask a carpenter who the best plumber In the area is. Ask a painter who he likes to follow for carpentry work or sheet rock work.

You get the idea. 

These guys and gals have been in the market and know who are good and who produces crap work.

Ask them if they have worked with some of the people you got a quote from and get feedback.

There are some guys who drag their feet and hold everyone else up. The contractors know who they have had to wait days for. Gather this input along the way.

Sometimes it's more important to know who not to hire than it is to find the perfect contractor. 

Good luck, hope this helps.

Jeff V

@Youdo Thirakul

First thing, I would only call a contractor when you have a job that you need a quote on.  Get 2 or 3 quotes and use these opportunities to interview a few new contractors each time.  You will eventually find that good contractor that you want to call for every job.  Until then, keep interviewing.  Just don't waste their time or they will start dodging calls ect.

Once you have that go to guy and you have repore with him he may be willing to walk the properties with you before purchasing, if he is sure that you will not jerk him around and he will get the job when you buy the deal.  They will not work for free but if it shuffles work their way they will help you out.

It takes time to build these relationships and Yes you will want to have 2 contractors for each trade on speed dial.  This allows you to keep your primary one honest by having a second quote to be sure he is still in the ball park on price, also he may have another job lined up and not be able to get to yours in a timely manner.  You will be able to call your backup buy and give him a chance to step up to the plate.  You can also tackle multiple projects if you have more than one guy on speed dial.

Hope this helps.

Jeff V

@Jean Claude

First off I'm not a lawyer, just sharing what I have found during my own research.

A holding company is normally formed to funnel all of your other companies, business ventures, joint ventures, passive investments, royalties ect into one entity.  Basically this is the entity that would wholly own all of your other businesses for the purpose to control all of the businesses from one.  Normally used by those who have massive revenues and business ventures going on.

Definition:

holding company

1. a company created to buy and possess the shares of other companies, which it then controls.

I'm sure this wasn't your intent, based on how you asked the question. Sounds like you were trying to ask, now that you have a few assets performing should you move them to another entity such as an LLC.

In my opinion, its much harder to move them after the fact than to purchase them from that entity. In other words, Its easier to have the LLC setup before hand and purchase the units with the LLC.

However, there are draw backs to have the properties in the LLC and may not be something you want to do unless you have reasons to do so.

For example, it basically disqualifies you from using conventional 30 yr fixed mortgages.  Thats a major blow to the investor just getting started.  It forces you to use commercial financing with larger down payments and shorter adjustable rate terms.

If you don't have a partner, I would just keep in my personal name and maintain adequate insurance to cover the liability. 

If you do have a partner, it would be better to have some sort of entity to limit liability.

Talk to your CPA as far as tax strategies go, but it doesn't seem to change a whole lot from my perspective llc vs personal name.  Talk to your Lawyer for liability protection information.

Jeff V

@Colton McDaniel

Due Diligence item number 1 should be check your flood zones on the fema website and have the proper flood insurance in place.

If this is your first flip, you will make mistakes and those mistakes will cost money.  If you pen out at 20k on rehab costs have 40k available before tackling.  You will run over especially on your first and you will get better over time.  You don't want to sink the ship on the first deal by not having enough reserves to get to the finish line.

Jeff V

@Bryan O.

Podio has alot of extensions that integrate with your email.  Mail Chimp, PieSync, Podio Tools Email Tool, ForeSync, InvestorFuse, GlobiMail, SwiftMail, ect...  some are free some are paid but point being Podio has the capability.

Can't speak for PipeDrive, I've never used that one.

I do have NoteSmith bookmarked for when I start getting into notes.

I ran across one called NoteWerx that is cloud based.  

Also Bryan I would like to chat about your note business sometime.  I'm about to go down that road myself and it looks like your well on your way ahead of me.  Any advice that you can give to someone taking the path you just went down would be appreciated.

Thanks,

Jeff V