All Forum Posts by: Lesley Resnick

iBuyers have the same challenges we all have as investors.  They need to buy below market, add value, and monetize the transaction (rent of sell).  The only difference is their scale and overhead, which is huge.  Their debt service is the size of a small 3rd world nation.  It is a cool idea, but scaling is really tough.  You need a lot of skilled people that are well compensated, thus adding to the cost.  I see opendoor running into the same problem.    I am the decision maker in my business and only have to cover myself.  I am agile and can make an immediate decision.  I do not have an HR department, accounting, etc.

Zillow's data set is amazing, they know the market better than anyone.  The Zestimates have been getting better from the data.  However, it is not good enough to buy houses from that data alone.  They still need people to review the deal.  Now if they could build AI software that could buy and sell houses lights out like trading securities, that would be something.  

Their goal is to eliminate the human element from the transaction and replace it with their platform.  They call it disruption and I am not sure the online buying of homes is a good model.  We would need a fundamental change in human nature for this to happen.  It is not buying the Amazon brand fabric softener.  If is not a good product, no big deal.  What happens If you screw up the purchase of your single largest asset….you are in a world of hurt.  Consider the number of successful, affluent people on here who are paralyzed by fear and do not participate in real-estate market.  Now extend that to the place you want to raise your kids.  It would be nice to have a person on your side and help you.    

Partnering with a GC is a new one on me. Would a token amount (1%) satisfy the requirement?

Sounds like a great project and you have a path.  Good luck.

I'm available to chat further. 

I will give the local banks a try again.  Historically it has not be very fruitful to try and work with the local banks.  They have been more conservative than the larger banks.

I can do the project in phases, but I am in for quite a bit already, the land acquisition, engineering, architecture, horizontal construction for utilities, water retention and so on.  I have more in the early stage than I will in any individual unit.

The insurance is pricy as well. I don't think the SFH or townhouse insurance was all that different in cost. I know that 20 is the magic number for increase underwriting.

I am planning on building an 18 unit townhouse community in Murray Hill, Jacksonville.  I am shovel ready, pending a few miscellaneous items.  I own the land.  The architect and civil engineer are finish up.  I have been working with a lender since April.  These projects take time, but I have been forced to fund more of this out of pocket than I was planning, due to the lenders time frame.  The loan was suppose to be done in 3 months and we are at 6 with no end in site.  It is effecting my working capital for other projects.  I could probably fund it myself, but it will take me longer than I would like and force me to pause all other projects.    

I am looking for another funding source. I would take on another lender or a JV partner. I am planning on selling them off to owner occupants, but could easlily convert to a build to rent.

Anyone had this sitiation before?  Suggestions?

I am open to creative solutions.

Your goal is to be just slightly better than your competition.  Easier said than done.  

Which is better:  Granite countertop or tile in the bathrooms, roughly the same cost.  That is an easier question compared to should you re-plum the house or upgrade the floors and kitchen?

Could you imagine if the attractive young family on a DIY show entered a home and went right past the farms sink to look under the basin.  "Oh honey, look at the shiny new CPVC under the sink."  

This part of the business is more art than science.  It is really easy to over invest.  People fall in love with their project and forget they will never live in the house.  

The best advice is consider who will be living in the house and build to their expectations.  Are the new owners professional, blue collar, do they have a lot of kids?  

Funding for small builders is really tough right now.  The terms are high and the level of effort to get the loan is onerous.  Fix and flip loans are cheaper and considerably easier to close.

Smaller building projects are often funded in cash on a phase approach.  As each house is closed, the profit is rolled in as working capital.  The snow ball effect.  It is a slow way to manage a project, but it works.

You could sell off some of the lots, before or after horizontal construction is competed.

ED - I agree with you about this site and residential construction.  I am not sure if there are members and they are silent or it is just not a focus.    

 Hey Jack good to see you buying a new place.

I am with you on your list.  EVERYTHING MUST BE MANAGED!  Title, loan, seller/agent and so on.  It always happens that when a deal needs attention it is the time you are most distracted and that is when mistakes happen.  If it were easy….

Make sure you consider the tax implications of selling it. You should also look at cash out refi. Looks like you clear 2500 a month NOI. That is good money.

The other issue is will you be able to sleep at night if you leverage or sell the property?  No judgement, you have held the property for 12 years and have not considered selling it up to this point.  Miami is an overheated market, can you find a property that will suit your investment requirements to replace this property?