All Forum Posts by: Michael Hayworth

This "putting together my team" idea gets promoted a lot, but it's really kinda overblown. 

When my remodeling business still took investor work, we used to gets lots of calls from new investors. "Hey, I'm putting together my team and wanted to see if we could get together about that." OK, do you have a project to discuss? "No, I am still putting together my team. Then I'm going to go look for deals." OK, well, we're all working about 60 hours a week right now. When you have a project, I'd be happy to discuss it with you.

Real estate agents are as busy as contractors right now. Ask some other investors for referrals to agents who understand working for investors, and talk to a couple of them. See who's a personality fit. Ask a couple of them to set up a couple of auto-searches for you and start looking for houses you're interested in. Once you've asked a couple of them to show you houses, you'll have a feel for who you like working with, and they'll have a feel for whether you're a serious buyer or not.

The overall point is....effective teams are formed in the context of actual action, not in a vacuum. That's why men who were in war still stay close to their platoon buddies from 10 or 20 years ago - they actually did stuff together. Get yourself in motion and you'll attract more serious people to your team.

Good luck in investing!

I would really advise you to find a decent GC and let him handle it.

It's crazy time for contractors right now. Everyone who's any good is booked. If someone can start tomorrow, well....there's probably a reason why. A good GC has a good set of subs who will make time for him in their schedule, because he sends them repeated work.

A good GC will also keep things flowing by coordinating among the different subs to make sure the schedule goes right, that drywallers don't cover up the walls before electrical and plumbing rough-in are done, that the inspections are called in at the right time, in the right order, so you don't end up having to remove work that's already done. And he'll know what inspectors in your area are typically looking for so you typically get green-tagged on the first visit. Inspectors get frustrated if they keep showing up and having to red-tag the work that was done. 

Can you learn to do these things yourself? Sure. But you don't know how to do them now. So the subs know they'll be doing more education for you, which means more work for them. And with it being busy season, there will be subs who will take a deposit from you to cash-flow things, then put your project on the absolute back burner while they take good care of the GCs who bring them regular work.

A good GC gets preferred rates from his subs, so even with his markup, you don't pay much more than you will pay to do it yourself. And you'll save money by not redoing work or experiencing extended delays. 

I'd be honest and tell the GC that you'd like to learn to GC your own projects. Some will be put off by that, but others won't mind, especially if you find a contractor who's an investor himself. A lot of people in this industry like to teach and mentor wherever they can. Even with 8 full-time crews plus associated sub, I have more business than I can handle. I don't really feel threatened by an investor wanting to learn to do it himself. Find someone like that in your area and use him on your first few projects, then start gradually taking more and more responsibility yourself.

I've owned a direct mail business for 12 years now. It certainly depends on the industry we're mailing for, but yes, we see a distinct slowdown in response around the Thanksgiving/Christmas season, another between spring break and end of school (followed by a short burst of OK response in many markets), then a slowdown during the late June - early August vacation season.

If I could do all my mailings during early spring, when the good weather lifts people's spirits and makes them more responsive, and again in September/October, I'd be pretty happy. 

Of course, mailing "We Buy Houses" type ads is going to hit different people at different times. If you're in a financial bind and need to sell quickly to pay Christmas bills, you may respond at that time of year when others wouldn't. But much of that response comes from absentee owners who aren't in panic mode to sell, and they'll be affected by seasonality just like most industries.

Your tenant is full of ****. 

There are specific rules as to what constitutes an actual service animal, and, unfortunately, landlord's hands are fairly well tied with service animals, even when someone abuses the system. (And they don't typically come in packs. An actual service animal is very highly trained and bonded to its human.)  Emotional Support Animal, on the other hand, is a ******** category that is not the same as an actual service animal. Search "service animal" and "emotional support animal" on this site and you'll find many in-depth discussions.

However, a couple of things to consider here:

1. You're in a very liberal state that is somewhat hostile to landlords.

2. Tenants who game the system like this can make a landlord's life miserable and eat up loads of time if they file complaints, even if you eventually win.

Since you inherited the tenant, it seems likely that whatever damage the little rats are going to do is already done. (I do allow pets, but I swear, I'd rather have a tenant with a lab or pit bull than those little rat dogs.) So you probably only have a few more months on the lease, or a year, max. If it were me, I'd just wait out the lease, then either not renew it ("taking this unit down for renovation"), or offer a renewal at a much (MUCH) higher rate, without ever mentioning the service animal thing. 

Help! I want to date Kate Beckinsale, but she won't take my call!

Your chances are about as good as mine. :)

You don't really need specific contingencies. Your offer should include an option period. That's in nearly every state's standard contract. During the option period, you can terminate for any reason or no reason at all.

Durinng the option period, you can do your inspections, and you can then either do nothing, in which case the contract moves forward unchanged; or you can revise your offer/request repairs/whatever, in which case the seller can agree or decline (in which case you probably terminate your offer); or you can simply terminate your offer if you've decided it's not a fit for you.

I have always appreciated @Manolo D.'s posts. He gives good information. But he's in California,, where they long since surrendered their freedom to their government. We don't work like that here in Texas (except that Houston, Dallas and Austin really want to be like California, so they're trying.)

If you put up a post in a public forum saying, "Should I pull a permit?", you're not going to get a lot of people willing to post publicly saying, "Hell, no." And I'll probably edit this one before long, so it doesn't show up in a Google search.

But the truth is, if you select a good contractor, a permit does nothing but slow you down and add cost. We pull them when we deem it necessary to avoid having the job shut down, and we skip 'em whenever we can. With the building boom we have here, many local cities are running 30 days or more to approve permits. And city inspectors are, by and large, guys who failed in construction, got pissed off that their genius wasn't appreciated by their peers, and got an inspector's license so that they could go find fault with other people's work. I know a couple dozen of them across several local cities, and there's not a one I'd hire as a project leader. When they do walk onto a job, each of them has two or three things they know to look for. Some are pretty reasonable, some are complete ********. It doesn't do a damn thing to improve the quality of your construction. (I worked for a Boston based company when it was revealed that the Big Dig was riddled with shoddy work and substandard materials, and every bit of that was inspected. Never heard of anything similar here in Teas.)

In most Texas cities (not sure about Houston) there's no practice like California of trying to go back on the seller of a property for work that didn't have permits. Find a good contractor - not a shady one - and listen to his advice. He knows what things you really need to pull a permit for and what you don't.

Real estate guru programs exist primarily to transfer money from your wallet to the guru's. 

You'll get a little bit of good info mixed in with lots of pitches to the next, most exclusive, far more expensive, level of training. You'll get success stories from speakers who tell you how wonderful it's been for them, but who know little or nothing about your local market and what it takes to actually succeed there. You'll get promises that they have access to exclusive properties that if you'll just go to the next level, you might be able to invest in, too. (What ********. We all know how tight competition is for properties right now. There's no guru that has a treasure trove of hundreds of below market value properties just waiting to pass on to his students.)

Read these two thread before you spend any money on real estate guru seminars:

Taking a stand after a $50,000 lie

Please help $41,000 paid to a guru company to be refunded !

If I truly developed an exclusive, repeatable system where I could make $20,000-50,000 per property and do it over and over again, I wouldn't be out trying to convince students to spent more money on my seminar. I'd be doing it over and over again (maybe taking on investors, maybe even going public) until I was wealthy as hell. I would probably train people along the way, because I like to mentor the next generation, but I'd focus on running my business and making it incredibly successful. But over and over again, when someone really digs into these gurus' finances, it turns out that they talk big about their investment success, but primarily made their money off of.....yep, doing seminars.

Oh, Fort Walton Beach! I read your post title and was trying to figure out how the contractors and inspectors in Destin were Friends with Benefits.

Man, it would make my life easier if I was doing some of the inspectors around here, but.......ew, no. :)

As @Ned Carey says, it's the title company's job to ensure clear title. It's also perfectly fine to let the title company explain to them that they're going to need to bring money to the closing table. That's something title companies are used to doing, since they have to do it on a regular basis. 

I bought a house last fall that my favorite title company dubbed the "Jerry Springer file." It had everything...financially illiterate seller, contested title claims, city liens, back taxes.....even a biker ex-husband who was still on the deed (and turns out to have never actually been "husband" at all). Biker Dude and Seller Gal wouldn't talk to one another - they'd only go thru the title company. Then emerges Biker Dude's other ex-wife who had previously signed a quitclaim deed but not the right KIND of quitclaim deed (and now that there was money involved, didn't want to sign the new deed without getting some of the $$). It was definite reality show material.

Title company kept explaining the financial realities of getting to closing table. Then seller would call me and say, "I need out of this deal." I would say, "Lani, you know you're gonna lose the house if you don't follow through. And I've got time & money involved for survey, appraisal, and other costs, so if you don't follow through, you're going to need to compensate me for those things, or I'll have to get my lawyer involved." She'd call the title company for advice and they'd say, "We really encourage you to get your own attorney. But, yeah, you do have a valid contract and the buyer has the right to insist you follow through."

We eventually got to the closing table, after about 4 months. The title company did all the detailed explanations to them, and I kept my sanity. I encourage you to use the title company the same way.

Best part? Apparently, somewhere during the process, an old flame rekindled. Seller Gal and Biker Dude showed up to closing together on his Harley, and rode off for a weekend away together afterward. I heard later it lasted 3 weeks. :)

(As a note, I show up to most of my closings on a bike as well. But if I'm riding day after day in Texas heat, I do try to shower at least, ya know, weekly. Biker Dude apparently considered that too froo-froo for him.)