All Forum Posts by: Patrick Philip

 Yes, but the next correction will be nowhere near as bad as the last one. People will panic, but it just won't be as bad.

Also, I think many people now erroneously assume that "the economy" and "home prices" are one and the same just due to the fact that the collapse of housing market was the catalyst of the last crash.

Although it still kind of scares me that I called my credit card company asking for a limit increase and they didn't even ask for proof of income. They just took my word for it and increased my limit. And this is a major bank.

Because the Federal Reserve is run by very intelligent people. They will purposefully slow the economy just to avoid major crashes. And keep in mind that when the economy "crashes," all that means is that we are admitting that we could not afford all that stuff we bought with credit.

Leading indicators = M2 money supply, new housing starts, new building permits. 

Also, watch out when the yield on a 2 year Treasury bond exceeds that of the 10 year note.

(This is for the ECONOMY, not the stock market, which are 2 entirely different things. Measuring one is not measuring the other. In my opinion, the stock market is so ridiculously inflated at all times that it barely makes sense.)

For those who have rehabbed a good number of them succesfully...

1. Do you always assume that you're going to be doing a complete renovation? (aside from maybe the roof). I ask because if a house doesn't necessarily need something replaced, for example let's say the cabinets are fairly new, but not brand new. They aren't bad enough so that they absolutely must be replaced, but if you don't replace them, that means your final product won't be as good as it would have been with brand new. Do you follow what I'm saying here? Should I just always assume I'm going to need new floors throughout, new cabinets, countertops, appliances, most or all of the light fixtures replaced, new paint in and out. Why hang on to things that are 80% of the way there when you could make them brand new and they'd be 100%? The only reason would be price and it might actually make more sense to buy things that you know are junk rather than to replace things that are "decent but not perfect."

2. What are your flooring schemes? I'm the type of person who likes to standardize everything. I want to basically do the same thing every time. I have recently been suggested to do 6" x 36" porcelain or ceramic plank flooring ("wood look") throughout the entire house, including all the bathrooms and bedrooms. I'm not personally a fan of carpet anywhere, but it's not about what I like, it's about what will appeal to the most buyers and get the highest price for the house. On my first 2 houses, I bought the cheapest square ceramic tile that looked decent enough from Home Depot or Lowe's. I hired a handyman to put it in for $1/SF and the tile cost about $0.69/SF. I won't be doing that again. I went shopping for flooring companies and found one that will install the "wood look" planks for $4.69/SF including materials and labor. I'm okay with spending more on the floor installation because I know it will be done right and I won't have to babysit a handyman every day.

 I was advised not to hand the project over to a GC, but to maintain control of the project myself.

The money goes from me to the electrician, without the GC as an unnecessary middleman.

I also really don't like paying people by the hour because they would work very slowly.

 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. 

When doing a conract with my GC on a rehab project, what are appropriate prices for:

-installing a microwave (above sink)

-hooking up stove (basically just means moving it into place and plugging it in)

-setting refrigerator in place (putting all the shelves in, hooking it up to icemaker line)

-dishwasher (anchoring it in place, possibly hooking it up to electric but maybe my electrcian would do that)

And also what is an appropriate amount to add to the contract for delivery of materials and the time it takes to go get them? I have a separate company doing floors, so the biggest items would be appliances and probably drywall if there is a lot of drywall work.

What is the "dumpster situation" like in a normal rehab project? On the past two, I've done a portion of the work myself and had mostly handymen helping me. We used those portable "Bagsters," but I don't think that's how it's done professionally.

 True. Except for 1 thing.

My end goal is to sell it as a stabilized asset. It would be kind of odd selling a complex with 11 luxury units, and 1 old junky one. Lol.

I've been looking at a 12-unit apartment complex. 9 units occupied, 3 vacant. There are many renovations I would do to the inside of each unit. Floors, painting, drywall, replacing fixtures, etc.

How can I do this while they are still under lease?

Or is my only option.... to renovate them while they're vacant and just tell the people the lease in unable to be renewed as they become available?

 What did you hate about the operational side? Was it about hating stocking soap and toilet paper between every guest? 

Because that gets back to my point about hiring a manager.

 Okay.

So are you at the desk checking everybody in? Are you cleaning every room and doing all the laundry?

What work do you hire out?