All Forum Posts by: Oren K.

Daniel,

I've looked at a couple of projects like this and leaving all $$ issues aside, the problem I saw was the layout of the structure.

There is a reason that most apartment buildings are tend to be long and narrow; it is so a window can be put on each room while keeping the size of the unit 'reasonable'.

I recently saw an office property that had a ~5,500 sq ft plate with a center block for the elevator / electrical / mechanical which is a common layout. There even were drawings for how to put in the apartments. 

Because of the plate size and to keep a 2 Bd unit between 1000 - 1200 sq ft, the units were narrow and very deep. The architect / designer was faced with the choice of either the bedrooms NOT being along the exterior and not having any windows or the living room dining area NOT having any windows. Both options are terrible as far as I'm concerned.

Just some food for thought.

Oren

@Vince Lucas  Yes, different situations result if different structures but maybe I missed it but I don't think you actually stated how you generally structure things.

That's fine if you don't want to say.

@Jack P. Anyone with good time management skills, co-ordination skills, some accounting skills and excellent people skills can fill this role. As long as the person is not pulling the permits, I am pretty sure they don't need to be a GC or have any kind of license. Experience in / with obviously helps. Their authorization comes from the owner.

Just as a PM will make or break a property for a remote owner, a person in this role will make or break the rehab. Changing mid project is very challenging, disruptive and almost guaranteed to create cost and time overruns.

@Vince Lucas so how have you structured your compensation; just the commissions on the buy and then subsequent sale, the management residual, a flat fee for sourcing and supervising the rehab (hold or flip), a % of the rehab costs?

@Roy N. What bugs me is that it is all 'online'. Its just not consolidated or publicly available for easy access. It is not an individuals privacy matter that a property had a notice, pulled a permit or did or did NOT pay their property taxes. The fact that you can get the information without a court order and only a 'fee' is evidence of that. Also, if anything American guard their privacy more tightly then we do in Canada but for the most part in the US, you can find out a whole lot more online regarding any property then up here.

That and the fact that Real Estate boards are still fighting rear guard actions in the courts to protect their turf by not allowing the publication of sales history is depressing.... 

One day.

Oren

Amadeus,

In Canada, the recording of who owns what real estate is done on a provincial basis, not county or city. See link below for information regarding Ontario

  https://www.ontario.ca/page/search-land-property-r...

You will find that it is nowhere near as 'friendly' the various / most county recorders sites in the US. As a non-registered user and without using a registered user (e.g. title search company / lawyer) you need to visit the Land Registry Office where the property is located, fill out forms, pay a fee and it will take some time to get the results; it sucks.

In addition, you will NOT find any information regarding property taxes, permits, historical sales, valuations, etc. that many US county sites provide. It may all be public records but, at least in Ontario, it is not consolidated nor easily accessible. 

A little Google searching should help you uncover how the province you are interested works.

Oren

The role can go by different titles; Project Manager, Project Supervisor, etc. The compensation can be on a contingency basis (share of profits) or as was the case with your PM example, % of costs fee or a flat / hourly fee. There are valid reasons / arguments each approach.

All this assumes that the person actually has the skills to do the job.

In addition, you would need to resolve the degree of autonomy that a person in this role would have. There are virtually always issues that come up during a rehab / construction project that mean spending more money. If the 'flip manager' has to get permission for every $1, they are basically acting as communications conduit and probably frustrating the GC since they just want an answer. On the other hand if they can larger decisions (>$1,000), especially on a 'low' cost flip, you are putting the success of your business (flipping) in their hands.

The questions boil down to; are you comfortable giving up the 'control' and do they value add?

Jeremy,

The answer is all over the map. Some owners treat their investment as business, have a proper set of books in an accounting system and can produce reports / information on demand. Others are shall we say 'more lax' and you are lucky if you can get a current rent roll much less real historical stuff (e.g. utilities, maintenance, etc.).

With individual smaller properties, you many times have long term holders, sometimes decades, who just did what they wanted to and never worried about 'all that stuff'.

It always astounds me when a Seller is not willing to do the 'work' necessary to get the highest and best price for their property. For example, I just recently reviewed a mixed use (retail / office) property where other then a list of tenants and some pictures, there was nothing available. The owner is a construction company so you would think that they could / would generate some floor layouts, a proper income and expense statement, etc. Nope, Nada, Nyet, Nothing.

I understand a frustrated owner not wanting to do it but then they are going to get lower offers to compensate for the lack of information just like at an auction... Buyer beware, At your own risk, AS IS WHERE IS

Oren

Alex,

I'm not sure what distinction you are looking for. Generally speaking, agents are on the street, meeting people, visiting properties, generating listings, etc. Agents work for brokers who run the office. As part of the agent / broker relationship, the broker has to sign-off on all listings, deals, etc. I'm not representing the brokers 'role' very well. Others should feel free to explain their 'value' in the overall process.

The agents / broker 'share' the commission that comes in. Sometimes agents are on 100% commission, other times, they get a salary + commission or a draw against future commission. Some agents are just looking for a place to hang their license, others (especially young ones) are looking to learn from a more experienced person and everything in between.

With few exceptions (@Joel Owens being one of them) the priorities (mostly in order) for all agents seems to be;

1) Generate listings - Gives agent a degree of control and guarantees part of commission

2) Sell Existing Listings - Double ending commission and more control of sale process.

3) Get Deal in Contract - Again, at least part of commission and some control of process

4) Close the Deal - Many deals fall through after the initial acceptance of the price  and basic terms. The quicker the agent can get the deal to the closing table the better.

5) Grow Contact List - The wider you can distribute a listing to potential (hopefully qualified) buyers the better.

6) Do bigger Deals - It does not take much more effort to sell a $1,000,000 vs a $100,000 property but the commission is literally 10 times a much (this applies to many areas).

Prospecting for a buyers is somewhere much further down the list for a variety of reasons including; buyer may not be in acquisition stage, buyer may no longer have available capital, buyer may not have fully disclosed criteria, etc. etc.

From my limited experience, initially an agent searching for you will do some work but you fall off the radar in a short period of time if you are not 'active'.

Oren

I agree with James on this and the question becomes how much of your time are you willing to invest to get back $500, $600 or whatever. It sounds like you have already been very persistent but unfortunately without success so it may be time to move on. If it was thousands, perhaps but otherwise move on unless you enjoy tilting at windmills ;).

Lesson for next time is to include in the purchase agreement instructions to the title company that they should hold back X months of rent from the purchase proceeds to cover possible misdirection of funds and only release funds once Direct Deposit from HUD into your bank account have been verified.

Oren

Maria,

You should also check out Midwest Realty. They do a number of East side properties and I know that the owner has extensive commercial experience.

Send me a PM with a bit more info on the properties and I would be happy to do an E-intro.

Oren