All Forum Posts by: Joseph L.

Hey guys,

I couldn't find any post similar to this topic.

Basically I have been approached by an agent and a contractor to partner up with. They both have outlined a basic split but wasn't sure if this is fair for all or if anyone has done it before and ifnit was a terrible idea or it worked well. I would do it on my own but I lack the cash and I would like to spread the risk just in case as it will be my first one.

Capital:
Me - 60%
agent - 20%
contractor -20%

The agent and I will decide on the property and then he will sell it. The contractor will do all the work needed on the house. (we are not looking for any "big" jobs such as roofing foundation work. ) I've seen his work and he can flooring remodel kitchen/bathrooms and such.

The thing is he wants to get paid for his work. He said he will take much less than usual but he needs income to live on. So we wouldn't have to pay any extra for material and labor will be cheaper than normal.

Is this normal for people who have partnered up with contractors?

I want to consider bringing him on as a partner bc I work full time and wouldn't be able to be at the property during the day. Do you guys go to yourvproperty and check on it daily? Or just check on it when their work is suppose to be done? He said he would be willing to work for cheap to keep our expenses down in order to see a nice profit.

I think it's fair to split on capital % and they agree.

Now the agent, he would not be getting his commission from selling the house and then his profit split but we would include the amount in the profits so we equally get our %of profit. But he said he might want the commissions from the front end buying the house. I will suggest that this should be included in the profits as besides the contractor me and him shouldnt get paid for any work and just make money if the property sells for a profit.

I really need everyone's cash on this deal as I don't have the money/expertise or balls to go at it alone for the first one. Nor do I want to lose all the money Ive been saving so I would rather make a lot less by sharing the reward/risk.

What do I bring you might ask? No one has done one on their own. The contractor has fixed properties for other people who flip so he would be counting on my accounting/business background to make sure the #s work. And also I have the most cash to put up. I guess I can myself the supervisor?

Thanks for any comments you can provide as I want to plan as much as possible before starting.

Joe

Tha ms for the quick response. I was thinking more about it and would definitely want some sort of experienced license contractor working on bigger projects(electrical ,plumbing, ect) but I know he does good work for installing carpets/tile and wood floors as well as bathrooms and kithen remodling. Is it fine to use him for that type of work and should I just review the different rules to make sure everything is up to code? I was also thinking about getting a GC license to be more knowledgeable on the rules/codes in my state. Looking up the requriements now but don't think it can be as hard as the CPA test..though I could be wrong.

Hey guys,

I am still looking for my first project and was wondering for you guys who rehab if you have to have a licensed contractor do the work?

The reason I ask because a family friend is a Handyman and does electrical/flooring/AC work and everything. He currently isn't licensed but would be a ton cheaper and does quality work that I have seen from electric to complete kitchen/bathroom renovations.

If I get a conventional loan or FHA loan and live in the property do I still need a licensed contractor?

If I get a investment property loan then would I need a licensed contractor?

Has anyone gotten there GC license in order to do some of the work themselves to save money?

I live in florida by the way and thanks.

He went to grad school with my brother is how I came in contact with him, Other questions have usually been answered in a day or two so I think I will have a sit down with him to get a clear picture of what he can provide and what I need and then re look at things after he see's I actually have proof of funds.

thanks for the comments guys if afterwards he sees im serious and is still taking a long time to get back too me and not I will start looking for another agent that wants the business.

I was just wondering if he thinks im not serious which is why the long turn around time.

Hello,

I am trying to put in an offer for my first REO and was just looking for some inight and opinon.

First I have been talking to to a buyers agent and he gave me a list of REO properties and I did find one that I believe would be a good deal so I asked him to provide me with comps so I can compare what the ARV would be to know if it was worth doing.

Do your agents take a while to get back to you? (2-4 days) or I am just expecting to much?  I am in the process of getting a pre-approval letter so could that be the reason it takes so long to hear back that he think im not for real?

Also even though I asked him for the list of REO's i've been reading that it is better to just go through the listing agent as they would be more willing to deal with you. I would be looking to do a conventional loan of FHA (dont' think it will qualify do to work needed) so would you recommend just cutting out the buyer agent and email the listing agent?

thanks for any help.

The similar houses were recently remodeled and move in ready. I would perfer to rent as it wont be a problem to get $1.8K-$2.2K in this area.

What are soem of the main thigns to protect yourself from in dealing with SS? Back owed taxes, other liens on the property?

Just thinking about having to replace the AC, maybe replace for termite damage, check for mold, and fix electrical do you think it might not be worth taking a closer look at the deal unless the sale price comes down?

Hello all,

Looking to try my hand a short sale I found on the MLS, the thing is it has been on the market sine June 2009 listed at $325K and now down to $230K. I know from the disclourse that there probably is termites/AC is broke and some light switches don't work.

Similar houses are going for around $255K - 320K, I haven't gone to see the house yet so I wouldn't know how much all that stuff would cost, and if the disclourse writtten in 09 said the AC was broke I am assuming he didnt fix it and there probably will be mold also? Not sure if he is still living there or not.

Can I walk through the house with my contractor to get estimates of how much it would cost to fix?

Also it is in a trendy neighborhood where the cheapest houses rent for at least $1,800 and they recently put up nice townhomes that have sold accross the street; how much will that affect the property?

Except for people in my company that are already assigned duties they would not be "doing work". Some have expressed an interest to gve input and ok the project and budget and our timeline for it. Bu besides the initial set up phase they wouldn't be doing any day to day work on the project.

I feel it might be better instead of borrowing the money from them to let them partner up and share in profits pro rata while we also take a "management fee %" off the top of the profits. This way limiting our risk and if anything bad happens then we will all have a stake in the property rather then me owing them $$.

I know I won't have a problem with the SEC as the # of investors and the $ amount is way below what you actually need to register due to Regulation D rule 504. And these would be money from friends so I am not soliciting or advertising for it.

I believe an easier way to probably finance my first couple of projects would be to start a Joint-Venture where everyone puts in capital at the start. This way they are not "investing" in the company but they are an acutal stakeholder/partner. this will help limit my risk and also gain experience.

Please correct me if I am talking funny or if you can give examples how you structered your first couple deals? (financing wise) I would like to stay away from conventional loans for the first few and just do all cash deals.

Opinons/comments are more than welcomed thanks guys for helping me understand more.

Joe