All Forum Posts by: Norm Park

Tony,

Both of above sound like sage advice and from the podcasts, Dave Van Horn is a RE "savage". 

I am not nearly as experienced, however, I entered into a partnership with someone that I met on BP. I essentially am the financier and my partner and his wife (RE agent) know the area that we bought very well and is the GC for the project. Since he has experience doing flips, he contributes market knowledge, experience and has the relationships (the contractors to do work, the type of work that will yield top return, etc).  We will split the profits 50/50. Some may say that I have a lot more skin in the game, but the way I look at it, I am paying for his experience and knowledge. He could easily do this with hard money, but this way he gets a better return. I see it as win/win with limited risk. 

I had to find an attorney in the area of the project that helped me draw up the terms of contract. This is where most of the work will be required. You have to really analyze where the project could go bad and have contingencies in place in case you run up against them - i.e. the house doesn't sell, you have unexpected costs during projects, what the SOW of the project will entail, what your marketing costs are (his wife as an agent will help minimize these costs), what if something unforeseen happens and you cant finish project, whos name the house will be under, and that might determine who will be able to pull permits if needed, etc.

Anyway, you should spend A LOT of time going over "what ifs" and sit down with your attorney and pound out these details. Then I gave the agreement to my partner and his attorney approved it and then we started from there. It seems easy until you sit down and start hashing out all the details. Remember that the devil is in the details. 

The good thing is, that once you formalize your working agreement, you can essentially keep using same agreement with minor modifications.

I am going to see the finished property in a few weeks. I am very excited. Trust me, it wasn't as smooth as I am making it seem, however, once the house is sold, it will be worth it. And hopefully we will be able to do it all over again.

I hope this helps.

Aloha

Hello BPers

I have a rental property in Charlotte 28212 area and am currently in the process of repairing significant water damage from a leaky roof. I am going to drop a bit into the rehab and I am trying to determine whether to keep or sell property. 

Anyone familiar with this area or Charlotte in General?

Aloha

That's exactly what our attorney told us. I think now he lives in another state and owns a huge house. Again both he and his wife are on title. I'll keep looking for a solution. Thanks. 

I have asked lawyers in NC, they tell me the same thing. I think this guy knew this and took advantage of the RE laws in his state. Upon further investigation, he has continued in his "unscrupulous" behavior in other states. Ill figure this out, it may take some time. Thanks for suggestions.

Hey BP. I have been contemplating on whether or not to post. But if anyone can help, I'll probably find it on this form.

I won't go into too much detail, but will paint general picture. Myself and partners invested a significant amount of money with an agent in North Carolina to develop land that he owned, then split up and sell. The agent ended up keeping our money, claimed he needed it to keep his business afloat and tried to file for bankruptcy. We took him to court, won a judgement with punitive damages (triple the amount).

Even after he filed for bankruptcy, we were not discharged as debtors. BUT, he put his wife on title of his properties. Apparently in NC, if your spouse is on title, it essentially becomes untouchable to debtors. This coupled with the fact that NC doesn't allow for wage garnishment, we are essentially left with a useless fraud judgement. The only positive is that we went to RE commission and his license was suspended for 3 years? 

We have a judgement for 10 years, which can be extended for another 10 (20 total), but we essentially have a useless fraud judgement. Any suggestions or strategies on how to go about collecting sometime down the road?

Thanks in advance

John, as a fireman in Palo Alto I see so much construction and renovations going on all over the city. The thing is that we are talking crazy tech money that people are able to throw around. I have been looking to get into flipping in the east bay and it sound like from previous posts that there is a lot of opportunity. For myself, I only have the ability to manage projects on my days off, so investing in the east bay right now is not really feasible since I cannot manage the daily operations of project. However, I do have rental properties out of state that I purchased 5-10 years ago and they have been both a blessing and a curse. But now, I can honestly say that I am glad I pulled the trigger. Essentially each property represents a year of college tuition for my 9 month old, God willing. 

What you have to ask yourself is:

1. what is your end goal? You need to define that now, or you will never develop a good plan.

2. How much time and money are you willing to give up to reach this goal. There are different ways to accomplish your goals. So if anyone tells you that one way is the only way, be wary. They probably haven't really explored all of the options available to you.

3. Are you able to handle worst case scenario? Like what if you get into a flip and the market turns. Will you be able to financially bear the hard times? I had to foreclose on a few rental properties out of state because they were costing me thousands of dollars in repairs, vacancies, and theft. It can strain your life and your relationships. Luckily, I was able to weather the storms and have a nice little portfolio of rental properties out of state that cash flow a small amount and have built up a good amount of equity. 

4. Last and most important. When you think about 10 years down the line, do you see yourself flipping homes or managing rental properties. Both are very different and if you are not truly passionate about doing what you end up getting into, it makes for a stressful and unhappy life. It took ten years to feel comfortable with my rental properties and that is WITH a property mgt company! Now, I am exploring partnering with someone to flip houses out of state. My plan is to learn the process and when I retire, I will take that knowledge and flip properties in the east bay like all of the other folks or move back to Hawaii and flip homes there (where I was born and raised). Well, at least that's the plan.

Aloha and good luck.

Aloha BP,

I found a great potential partner to do flips with on the East Coast (he is boots on ground, I am investor). I am flying out there next month to check out the market. In the meanwhile, I would like to do some market research myself before going out there. 

Does anyone have a good "process" that is used to do some preliminary market research online? And what things besides the obvious (jobs, schools, sales history, etc) things that I should be analyzing?

Thanks in advance...