All Forum Posts by: Michael Evans
Michael Evans has started 17 posts and replied 186 times.
Post: What’s your views on getting Solar Panels?
- General Contractor
- Palm Desert, CA
- Posts 188
- Votes 79
Maybe it would be a better investment to put a windmill on your roof? Just saying...
Post: Loan ideas needed, big fixer-upper
- General Contractor
- Palm Desert, CA
- Posts 188
- Votes 79
Jacob,
What market are you in? Three weeks to get a construction loan and do the rehab? Seems VERY optimistic. Be sure you are realistic about your schedule or you will end up way upside down on your numbers.
Good luck!
Post: Loan ideas needed, big fixer-upper
- General Contractor
- Palm Desert, CA
- Posts 188
- Votes 79
Quote from @Jacob Stevenson:
We just made an offer on a multiple properties, one has minimal work to be done, the other is a massive project. Owner inherited the side by side properties and wants to move on from both.
So, we are in a similar situation. I would like to buy the smaller project with cash and have it turned around in three weeks. Get a tenant in there and refi. The larger project, I hope to do some type of construction loan like you are.
I will be following this thread and hope for some good feedback from those with experience.
Post: Loan ideas needed, big fixer-upper
- General Contractor
- Palm Desert, CA
- Posts 188
- Votes 79
Don't be afraid of mold. It can be you friend on the purchase negotiations, just like cat pea and lead paint. In California, the law requires that a licensed HAZMAT contractor quote and do the remediation which you can deduct from your purchase price.
Post: Loan ideas needed, big fixer-upper
- General Contractor
- Palm Desert, CA
- Posts 188
- Votes 79
Quote from @Constancia R.:
Quote from @Jake Wiley:
I kept talking to lenders until I found one that wanted to see several estimates from contractors, but we would be the ones that called for distributions and the money was released to us to then pay the contractors once the work was completed. So, in essence, we were able to use the funds for the work we completed independent of a contractor as well as pay contractors and subs for the work they completed.
In this scenario, we had to manage the float pretty tightly, as the bank would not release funds until stages were complete, thus no money upfront, however, in most cases we were able to use invoices for materials, etc that were on a short credit window to make it happen.
Post: Loan ideas needed, big fixer-upper
- General Contractor
- Palm Desert, CA
- Posts 188
- Votes 79
There are other downsides to using a bank construction loan. They require a detailed cost breakdown, which is very hard to do on any remodel because there are ALWAYS unknowns and changes during the course of the work. I have been doing remodels for 25 years and have NEVER seen one that came in on budget. Change orders are one of the biggest reasons why it is so hard to keep a project on schedule. Also most banks require that funding goes through the GC not not the homeowners and then they "hold back" 10-15% of the cost of the work until the end of the job.
Post: Loan ideas needed, big fixer-upper
- General Contractor
- Palm Desert, CA
- Posts 188
- Votes 79
If you get a bank construction loan to fund the rehab it will be more expensive and most contractors will decide to pass on the job because of all the paperwork. Contractors hate construction loans because of the retention the bank holds back and they end up having to wait 2-3 months to get the final payment. Try to fund it with private money of maybe a HELOC
Post: Cost Segregation Study
- General Contractor
- Palm Desert, CA
- Posts 188
- Votes 79
I thought it only applied to commercial property?
Post: Cost Segregation Study
- General Contractor
- Palm Desert, CA
- Posts 188
- Votes 79
I thought it only applied to commercial property?
Post: Is this home worth purchasing given concerning inspections?
- General Contractor
- Palm Desert, CA
- Posts 188
- Votes 79
Good job getting the inspection report done. However, it is not enough. Look at how many times he recommends a "licensed professional" to evaluate it. Get three bids for each item and be there to meet and walk the property with them. Also, keep in mind the electrical is VERY important. Not a place you want to cut corners.
Good luck!