All Forum Posts by: Patrick Philip

@Patrick Philip theres nothing wrong with the houses. No offense meant, but the problem is you. Either you didnt do the proper research to know the neighborhoods and the price points they support. Or you over renovated based on the price. The properties that arent selling are priced to high. A properly priced and marketed house shouldnt sit, unsold, for more than a few weeks to a month.

@Patrick Philip  A buyer "didn't like the wood framing"???  

That sounds like something we call a "smokescreen objection".  Often used by buyers when they are feeling under pressure, they throw up an insurmountable objection to take the heat off.

The way a capable salesperson handles a smokescreen objection is to smile, nod and to ignore it.  If it comes up again, it might be genuine.

I don't know the Florida market, but I can tell you with certainty that here in Massachusetts, the vast, overwhelming majority of homes are built with wood framing.

@Patrick Philip That's an awfully broad brush your gurus are painting with.  

Older than 1970?  I'd love to hear their reasoning.  My town was settled in 1620.  There are plenty of solid houses here that are VERY old.  People buy them, sell them, renovate them and rent them.  Every day.  If they has said before 1978, I could at least guess that they're trying to avoid lead paint.

Of those homes, I'd guess that 80% of them have some sort of wood exterior.

Small houses?  It depends on the local market.  Plenty of small houses around here make great summer rentals, as we're an oceanfront community.  If you're in a market where older folks are downsizing, smaller (sub-1,500 sq ft) homes are exactly what buyers are looking for.

4/2, 3/2 as minimums?  Again, that varies greatly by the local market.  Downsizers won't want 4 or possibly even 3 beds.  Many first time buyers won't be able to afford them - but both are likely to snap up a 2/2 or a 2/1.

Needing renovation?  That's how fix & flippers make their living.  Not to mention those that fix & rent.  If you can buy a home needing renovation at the right price, why not?

Lots of homes are sold around here without a master suite and without garages.  

I think your gurus are missing the mark as generalities often do.  I hope you didn't spend too much on them!

I focus on mainly retail commercial these days but started out selling larger apartment buildings.

The company mentioned above and a ton of others likely use a bid system these days. It is almost like auction style but with rounds of bidding. The seller tries to extract every single basis point out of the property and looking for a buyer to (make the market).

The properties with lot's of eyeballs on them get bid to ridiculous levels where buying at that cap rate everything has to go almost to perfection to realize the upside being touted with the property. Literally THOUSANDS - not joking of so called syndicators (newbies) are looking for this stuff. Sellers want the newbies because they know the old guard that underwrites conservatively will not touch the numbers they want to sell the property for. So you really have to get something off market or listed internally to have a chance.

When I look for clients on retail properties I ask the listing brokerage or the seller this question. ( Is the owner trying to extract every single basis point out of the property OR are they looking to go with  a buyer that is solid with a price they can sell at?).

The answer is very telling as to the current mindset of the seller and also in the future if that mindset might change. I am looking for highly motivated sellers with problems that need solving either a time target, cash issue, management issue, or all of the above. If a seller is just testing the market and will refi if they do not get top dollar that is a property I put zero time into. I can't blame the sellers. If I was selling I would be looking for the buyer to pay top dollar as well.

Originally posted by @Patrick Philip:

Originally posted by @J Scott:

Originally posted by @Patrick Philip:

I want a GC to do everything besides: plumbing, electric, HVAC, roof, landscaping, floor installation cabinets, granite.

I don't want him to find these people for me. I already have the people on that list that I like.

Come on Patrick...I remember writing a post to explain this to you about two years ago...

That's not the way things work.  The role of the GC is to manage the project.  The whole project.

Having two GCs on a project is like having two drivers in a car.  Doesn't work.  One driver, one car.  One project, one GC.

A good GC isn't going to want to only be responsible for part of the project.  His job is to make things run smoothly, keep everyone on schedule, ensure that there are no dependencies that aren't accounted for, etc. 

And a GC can't do those things if you're getting in the way managing the plumbing, electric, etc.

Like I said above, go back to whatever guru gave you this information and ask for your money back.

 I put a lot of work into finding subs that do quality work for a good price. If he's willing to use my guys without trying to skim any money out of the deal, then sure.

A good GC will have his own subs and will not want to work with yours.  And he certainly won't work for free. 

Either hire a GC to manage everything or manage everything yourself. 

Originally posted by @Patrick Philip:

I want a GC to do everything besides: plumbing, electric, HVAC, roof, landscaping, floor installation cabinets, granite.

I don't want him to find these people for me. I already have the people on that list that I like.

Come on Patrick...I remember writing a post to explain this to you about two years ago...

That's not the way things work.  The role of the GC is to manage the project.  The whole project.

Having two GCs on a project is like having two drivers in a car.  Doesn't work.  One driver, one car.  One project, one GC.

A good GC isn't going to want to only be responsible for part of the project.  His job is to make things run smoothly, keep everyone on schedule, ensure that there are no dependencies that aren't accounted for, etc. 

And a GC can't do those things if you're getting in the way managing the plumbing, electric, etc.

Like I said above, go back to whatever guru gave you this information and ask for your money back.

Originally posted by @Patrick Philip:

Originally posted by @Will Barnard:

As J stated, not a job for the GC, send to the proper sub - handyman or appliance install crew.

 In your opinion, what are the jobs that a GC should do? I recently went to a seminar given by someone who has flipped close to 500 houses. I was instructed to build a team that consists of:

GC, plumber, electrician, HVAC, landscaper, floor installer, roofer.

It was my understanding that the GC should do everything that is not covered by one of the others. 

There are two basic means to completing a rehab job. One is to hire the GC who will hire all the needed subs. Option 2 is to act as the GC and hire each sub yourself which obviously requires a lot more work on your part and experience helps too. Without the experience, you will undoubtedly do things in the wrong order, do things much slower, and overspend on labor and materials as you don't typically have the buying/purchasing power that an experienced GC has. Which way you go depends on your goals, time availability, and skill sets. To act as your own GC will require you to build that team of subs and starting out, this will be trial and error with lots of errors so plan on them.

If you are building or adding square footage, you will need a GC to do the foundations, excavations, rough framing, etc. So at that point, you have to ask how much you will actually save by trying to hire each of the needed subs beyond that. If you are doing simple rehabs that don't require major construction (lipstick flips), then acting as your own GC would likely be better but not in all cases.