All Forum Posts by: William Sumnicht

@Jon Lafferty Congratulations! That's fantastic.

Traditional mortgages have such amazing rates right now, if you can get them, and use the cash for the rehabs. If not, Josh Sterling didn't seem to be hurting from using blanket loans with a portfolio lender (podcast 64).

@Brian Gibbons If I could find a high five emoticon, it would go here.

@Patrick L. @Franklin Romine You're absolutely right. Didn't have comps accessible to me, directly. But if I would have felt more comfortable with the rest of the numbers, bugging my realtor friend to get that information would have been the immediate next course of action.

@Brian Gibbons Owner didn't seem desperate. But would be one heck of a deal if an owner contributed to the sub2. Assuming you've done that in the past, have you had any issues with original owners not following through on their contribution? The suggestion you made to pay $600/mo if free and clear - does that assume a negative cash flow, with the benefit of paying off quickly?

@Bill Jacobsen Great advice.

@William Robison Thanks for spreading the word! Much more likely I'll be able to attend the Crossroads meetup than the LS, but however it works out, I look forward to meeting you and the others.

@Wayne Freeman The two percent rule applies to your "all in" cost, rehab included.

However, it is just a rule of thumb to help ensure your property makes positive cashflow instead of negative. You should still run the numbers to see where you stand.

Hope that helps.

@Aaron G. Love that plan.

@Drew Denham I love that, man.

And I love what @Adam F said - Regardless of title, it all comes down It all comes down to the individual's capabilities.

Maybe there is another way you can vet your handyman with his $30k bid?

I've had extremely poor and exceptional service, from handymen and contractors alike.

For me, the decision making process starts with the job at hand. Is it managing the complete rehab? Don't hire the handyman. If you're the project manager, and it's a job within the rehab: Is it a job that requires highly skilled labor? Does it include liability to the investor or the worker? How quickly does it need to be completed?

Next, it's nice to know the strengths and limitations of the worker. Not just in what trades they're capable, but their personality type. Where does their attention to detail fall? How right do they do the job? How complete do they leave a job? Are they committed to your job, or are they there late and half the time? How much of a surprise will they deal with before requiring a change order? How willing are they to come back and fix a mistake that they made? Will they try to charge to fix their mistake?

I like to hire guys for smaller jobs, and get to know their work style, attention to detail, quality, and business ethics. Knowing that, and knowing the job at hand, seems to make it much easier to place them correctly to jobs on bigger renovations.

And of course, with all new contractors or handymen doing anything bigger than tightening a screw on a door knob, there are some great ways to safeguard yourself:

-Hire top rated workers (Angie's List, Home Advisor, or referrals from other investors or contractors)

-Ask for and vet proof of license, bonding (if applicable) and insurance

-Get contracts with specific scopes of work, timelines, and payment schedules that match up to completed work.

Wow. Forgive the novel.

I see you've flipped a couple of houses, @Drew Denham . Awesome! I imagine you have thoughts on contractor vs handyman, as well?

Thank you all for resting my discomfort, here. I feel a thousand times more comfortable just calling with full disclosure, a request for info, and maybe having the opportunity to make a new friend in the business.

Thought I saw it advised a couple places here to get into the units. I just couldn't figure out how anyone was doing that comfortably.

@Jon Holdman In my, albeit limited, but few projects of experience, that's how I've always done it (nearby online listings). I love that you and @Matthew Paul create new alliances doing this.

@Michael B. Good call. I like that way much better.

@Ryan M. I look forward to being at that stage.

In general, I consider myself a social person. I enjoy being around and interacting with other human beings. But when it comes to calling the numbers on the "for rent" signs on the same street as a rental I'm involved in, I don't feel great about it. It's not because I feel uncomfortable picking up the phone and calling a stranger. It has to do with the fact that I'm the competition, doing market research, and wasting the property manager's time on a showing that is guaranteed not to rent. With that in mind, I definitely don't feel comfortable with non-disclosure, but full disclosure seems to come with it's own set of issues.

So my question is, those of you that do get out and look at the available rental units near yours, what have you done to move past this? Where do the ethical boundaries lie, and what has your response been from the person at the other end of the line?