All Forum Posts by: Matt Motil

Hi @Sam Boutros, welcome to BP! Great to see more Ohio investors. 

This is a great place to start in gaining the knowledge needed to be successful. If you haven't yet, subscribe to the BP Podcast and listen to them while driving or other free time. Unbelievable amount of information in those free sessions. 

I'd talk with someone from your state that is familiar with LLC's. Each state is different and has different requirements. Not all states require a statutory agent. Not all states require that the company's address be located in that state.

I agree with @Jon Holdman, your contractor should have pulled permits, which would require your local building department to sign off on. The building department will issue a final inspection approval and/or Certificate of Occupancy when the work is complete according to them. If the work being done was not something that wouldn't allow you to live there while it was happening, an actual CO might not be issued, but it's definitely not just for commercial work (your contractor is wrong). 

All that being said, ultimately if your contractor isn't getting paid in a timely fashion they could file a lien against the house to protect their rights for payment, so it could affect you at the end of the day. Typically on 203K loans the lender will require the work is done by one of their pre-approved contractors. If this was the case, then the contractor should have some kind of previous working relationship with the lender. I would encourage the lender and the contractor to talk, as it seems there is some disconnect going on there. 

When we cut cast iron pipe for underground utility work we typically use a chop saw with a graphite cutting wheel. Depending on the size of the pipe and the age you described, you could also get the same kind of wheel for a hand-held grinder that might be easier to work with, especially if you're working overhead.

I do not have a good recommendation for you, but a blower fan in a typical furnace will run you around $400-600 depending on the size of the motor. When he said it's the exhaust fan, I assume he means the little fan that clears the vent of combustible gases before the ignition kicks on the burners. Those little fans do burn out after about 10-15 years and the quote to replace them is always really high cause it requires a lot of labor to tear the unit apart. The last one I got quoted was around $800-$900. That little fan though can be seen from the exterior of the unit and I replaced the last one myself by purchasing a replacement fan online for $117. It was about an hours worth of labor and nothing more than a screwdriver and a couple wrenches. The pressure switch and limit switch are normal parts, but I'd get a second opinion on whether they actually need to be replaced or not. It sounds to me like you're being asked to replace parts that might not need to be replaced to help run up the bill. Those two switches are not very much money compared to the motor. 

If it's the main blower motor, hire a professional after you get a second opinion. If it's the exhaust fan, buy one online and YouTube how to replace it. Hope that helps. 

The 50 and 70% rules are great to get you going as to whether or not you dig deeper. Now that you see that the numbers make sense, it's time to dig deeper. I'd ask for actual expenses for the past two years, actual rent roll with vacancy history for the past two years and what the current rent roll for the building is. Once you have all that info you can run the numbers again. If it all still seems to make sense, then you want to look into deferred maintenance on the building and start the due diligence to determine what problems you will be buying along with the building. 

I was going to suggest a local bank or credit union as well. I know that @Bob Green has posted recently about credit lines that they offer with as little as 10-20% down and a 5x multiplier. You might look him up and check out what he has to offer. 

Contact a real estate agent and ask them for the forms. They should be standard in your state. 

Contact a real estate agent. They can get you a copy of a sales agreement. The RE sales agreement should be a standard form in Indiana. All you would do would be to put your name and then "or assigns" as the buyer. This gives you the ability to assign the contract to someone else or purchase the property yourself. If you need more assistance or guidance, a real estate attorney in Indiana should be able to answer any of your questions, as well. 

I would going to suggest the same thing as @Brian Gibbons

An actual, written up JV agreement should be in place to protect everyone's interest, even if it is family.