All Forum Posts by: Josh Sterling

Would anyone be willing to email me, or post the agreement they have contractors sign.

Thanks
SR

JScott,
That is the setup I'm going for. How do you handle the materials?

Thanks

Bryan,
Being that you handle all your materials yourself, if a sub is on the job, you were unable to get there, and they needed materials that wern't anticipated do you just have them choose & pick out the items and go get them?

Thanks James,
Do you pay your main guy hourly or by the project? Also, do you have just him or a laborer too? Where did you find him?

How are you guys building your teams for rehabs?

The way I see it there are 4 basic options:

1) Hire a guy (or two) to work directly for my llc (W-2 employee) pay hourly.

2) Hire a guy (or two) to work on a project by project basis (1099 them) pay by the job.

3) Hire a general contractor and have them handle everything (sub-out work, order materials, etc)

4) Act as the general contractor myself. Take care of subing out some of the heavier work (electrical, plumbing) but mostly have a couple guys that are handy to do the lighter work (cabinets, flooring, hang doors, etc)

I'm leaning towards option #4 but mostly concerned about materials. I can put together a big order and have most of the material on the jobsite, but there will still be alot of things that are missed, requiring the "handy-men" to make multiple store runs. I don't really like the idea of paying someone $15-20/hr to be spending a couple hours a day running back and forth to the hardware store, plus I would have to trust them with a company credit card, and not to buy a bunch of stuff that never made it to the job site.

Thanks for any advice
SR

@Steve, we might go conventional as a last resort, but we already have 2 mortgages
so we will hit the 4 loan limit fairly quick. I'm looking for long term solution so I don't have to worry about financing every time I fond a deal.

@Jon, thanks for the link! More phone calls to come.

@JScott, can you elaborate on your setup? What are the terms of the loans you are getting? Is a separate loans or a line of credit? We would love to have financing of that size available and be able to use some of it for long term holds and some for flips.
Do you use this financing to purchase you long term properties?

Thanks everyone!

I agree with the above. We quit claimed several properties to the LLC, it took 3 times of going back to the register of deeds because everything must be exact with the paperwork. So, if you do it yourself be prepared for some frustration. If I had to do it over again I would probably have a real estate attorney do it.

Thanks for the replies guys. I've been looking for small banks in the area. I found a list of credit unions online, there must be a list of every bank and it's total assets/ # of branches somewhere?

Well, I'm really spinning my wheels here. In the past couple weeks I've called 30+ small banks/credit unions trying to line up financing for purchase/rehab. A 100k line of credit would be ideal.

Of those 30+ banks I got some interest from 2 commercial loan officers.

This week I met with both of them, and its not looking good. We have 7 rental properties, 5 of which are free & clear (all owned in an LLC). But they are very reluctant to lend on them.

Anyways, when I met with the last one today she spent the first 10 mins of the conversation telling me how this was virtually impossible, then she came accross a statement in our paperwork showing 200k in investment accounts and her whole tone changed.
I told her we are open to creative options to get the financing and she said they may be able to work with us on a cash secured line of credit.

Is anyone familiar with this type of financing?

What capital/loan ratio would be typical? (ex. 50k in CD at bank gets us 100k line?)

If they want to go with a 1:1 ratio (100k in CD gets us 100k line) is this even worth it? Doesnt make sense to me then, we might as well just use our own cash.

I am hoping to leverage the properties, but since they don't want to lend on them alone, has anyone had luck combining cash with free & clear property to get the collateral up?

Thanks
SR

http://www.waynecountylandrecords.com/

I don't know about short sales, but the above is a good link for Wayne County. It shows deeds, mortgages, discharges etc. I sometimes use it to look for mortgage balances.