All Forum Posts by: Philip McPherson

New but really looking to start taking real action steps. Been studying a lot of Pace Morbys stuff and am hoping to connect with others in the area. Been to local meetups but interested in specifically linking up with other creative finance people, especially for recommendations on things like a TC, escrow officer, etc. Would also love to hear experiences of others in the area. Have you had a hard time breaking in or finding deals?

So I'm brand new to the game but looking to start getting my first deals soon. I've been going to some REI meetups and met someone I'm very much interested in creating a business with. We immediately just hit it off personality and goal wise. We most likely will be making the foundation of our partnership based on creative finance and I'm just curious what some of the steps everyone recommends on making this a legal, equal partnership as we begin looking for deals soon.

@Mike Wood it would be two buildings on one lot. A duplex and a triplex

Quote from @Mike Wood:

@Philip McPherson As an investor that builds 2/1 duplexes, I can tell you that building a house for $65.88/ft2 is not possible.  Normal allowance items (cabinets & countertops, plumbing fixtures, lighting, appliances, flooring, hardware) will run you right around $20/ft2 on duplexes this size.  That would put construction costs at ~$86/ft2, which is just too low now a days.  

I just finished a 2/1, 800ft2 each unit, new construction duplex and it ended up at $121.87/ft2.  3 years ago, I finished a 2/1 895ft2 each unit, new construction duplex and it end up at $102.39/ft2.  There is just no way now a days to finish these duplex small units for less than $100/ft2.

I would guess that they are offering you a shell of a house, with not drywall, insulation, paint, etc.  Likely not even providing plumbing/electrical/HVAC included (likely ~$17-20/ft2).

Lastly, since there would be 4 buildings on one (1) lot, this would have to be a commercial loan, so worse terms on the loan and harder to find insurance.

This is a shell yes. This is the actual text from the email he sent me 


"Architect would take rough estimate about 6-9 month to put together .
That included all building permits ,plans Architectural, rough plumbing, and electrical, and HVAC.

Now that is a separate cost to you we don’t include this prices in out bid.

Now to build you 3 units 850 sqft each one Bathroom and two rooms .
With laundry room.closets and kitchens areas .
No flooring , no lighting , no cabinets ,
Just ONLY , your rough electrical , plumbing. Insulation stander .Drywall .tape and texture . Nothing crazy or smooth. Roof shingle or flat roof .
No tile.
On a 2250 sqft area living space .
No garage no car ports .
You looking at a total of .
$168,880 .00
Again please know this is. 4 month to 6 month project . Depending on material, delays or the city of Lasvegas.
From the time of the permit been issued. Not from the time we sing contract.
I hope this helps .

And again this is a shell.
(Roof ,Stacoo ,windows stander to code .insulation, drywall. Final tape and texture. )electrical and plumbing.
Mini splits not included just the electrical for them.if wanting real A/C units add 6500 per unit on top of the price .
That’s where we are complete .
All other finishes, or high end ideas or items . It’s up to you guys . And is all extra cost for labor and materials."

Quote from @Chris Seveney:

@Philip McPherson

1. Is he licensed?

2. Did you have plans provided to him to bid

3. Did you give a formal scope with the plans

This could just be foundation and framing with no exterior sheathing/roofing, doors windows etc

How do you define what he is doing.

Get drawings put a scope together and get several bids from licensed contractors

 He is licensed yes.

I did not provide him with these so much as just asked him what the original plan the current seller had that been mentioned me while I was chatting with one of the employees on property while I was viewing it.

So I am a prospective first time investor looking to own multi family rental units. I had only been considering house hacking and renovating older properties until I came across something this week that has me wondering if I should shift my focus. My realtor took me to see a rehabbed duplex that sits on a quite large parcel of land. The large empty space behind it has apparently been zoned for three more units. One of the crew members doing the renovations on the property said originally the owner wanted to build these three units but eventually decided to just sell the duplex instead when finished. Of course this piqued my interest and when asked what something like that would cost he told me about $50k a unit. This seemed so, so much lower than prices I've read online. I did get a business card from him for the company and when I emailed was told I could get three 850sq foot two bed one baths for $168k. Now this is just a shell (no flooring, fixtures etc) but still seems unbelievably low to me. Is this price plausible? could I make this happen while house hacking the duplex and eventually have a huge cash flow on this property in a couple years? Just seems way too good to be true.