All Forum Posts by: Rod F.

I had a similar problem.  My Contractor(#1). After a month had done very little . I had called and chased him down so many times I just got tired of chasing him. I would go down and work on the weekends. he was supposed to be in and out during the week.  I finally went to the better business bureau website. found one of the highest rated company's. called them, got a quote with drawings.    They worked in amazing speed. Everything was done to code. Even when the inspectors showed up , he asked who was my contractor and he said everything was perfect. After the job I Had a line in the yard with roots in it. They recommended another sewer Contractor.  Wow next day service. I swear I had to chase him down to pay him.  Contractors you get what you pay for. A deal usually isn't a deal. 

Lets just say contractor number one hasn't ever asked me for another job. We agreed on a price and I paid him and we went our separate ways.

It sounds like you have come to a point that I wouldn't trust him to finish the job. He might try to put a lien on property. document everything done, take lot of pictures, have drawings and quotes by a professional to finish work. No one want to go to court. but you might be able to agree on a walk away price.  I would think even a judge would say something like you finished 50% you get paid 50%. looking at his quotes. 

I am sure there is a regulatory board for his profession. sometimes just the mention of them gets action.  

Alfred,

Creating credit is something that takes a little time. I had a friend that had "NO CREDIT".  Never bought anything on credit.  What he found out was "that's worse than bad credit."

 I helped him create his credit report, by following a few steps. 

First he went and got a prepaid credit card. I told him to use it. pay it off every month. (you are actually using your money) but your buying a credit status.

Second he went to a local "carmart " type dealership. asked them if they reported to the credit bureau.  They Did. he bought a car there. I told him to make every payment on time except the last payment. the last payment you pay off 1 month early. always pay every loan off early. Even if you are late on a couple of pmts during the term . pay it off early. it goes on your report as paid off early. He traded cars during the time. that showed a paid off early and a new loan.

Third when he got his income tax in to go to a local bank and buy a Certificate of Deposit. Walk out of the bank. get in his car , go eat lunch, come back to the bank and borrow his money back using the CD as his guarantee.  Here they will loan you your money back and cannot charge you more than 2 or 3% more than they are paying you for the CD.  Again you are paying a price to get that credit report.  

4th. any old debts that haunts you. try working deals with those creditors to clear up your name.   

He has followed this for about 4 years. He now has a credit score in the 750 to 800 range.

He is going to get a loan for his first house this year.  He has saved his down payments by buying the CD'S.   as they mature he will proceed. 

That I how to build a credit report.  Always pay off early!!!

how to do a real estate deal?

Honestly, I think I would be looking for an owner finance deal. Or a Rent to own. Maybe a lease Option. That would give me a lease until I had time to build a credit status. 

      This is a great place to find people who know "Creative Finance Options". Listen to the podcast, I hear new IDEAS every podcast. The options are out there.

My disclaimer is "I am no professional this is tactics that has helped a couple of friends."

You gave us no real numbers but, You could have walked away from that buyer. Made no concessions . paid interest. sit on it and waited for a better buyer. The cost of the property grows every month. Either way you pay a concession by holding a property or selling it at a discount.  Some people lose on a flip.  

Honesty,  you made good money. Take the money and flip another.  Use the profits and your heloc to buy another if needed. You paid it off. The bank will be happy to do another deal.    The next flip is calling you sounds like you were successful.

I still own the house we bought when Daughter went to college. Rehabbing it again now. She hacked it with roommates when she was in school. All she had to pay was her share of utility's.   It worked , cash flowed, an still does. With that said.

I don't buy anything that has HOA fees. I can't plan for assessment's. I yr leases only If it sits empty during the summer break. you will be paying for vacancy's also. Even inurance will make you pay for a vacancy permit extra If empty over 30 days.

Wife bought a Condo Last year. Math didn't work for me. but she just had to have one. (bought what she wanted to live in someday). So Far She has made payments. collected rent and deposits from someone who never moved in. Empty again. repaired heat unit. paying utility's And fielding calls from people who cant afford the rent. there are more dated units. in the complex drawing less rent. and that's not helping either.  I'm just setting back and waiting on the assessment's to come in.

More headache for less returns doesn't compute for me.   Never fall in love with a unit.

I would look for a house in the area. no assessment's or fees. Just like a dorm' roommates help with bills. 

That's just my opinion. each case is Different.

I decided to keep and live in one of our rentals during a rehab to flip. The banks really had me jumping through hoops.  Buying something I owned in the llc. My business partner decided to keep one we had under contract for his family. we made a change before closing. I had to sign off and release my interest and the llc offer.  I would talk to my tax professional and real estate attorney. Usually consultations are free if you are a client.

Andriana,

Forming an Limited liability Corporation here in Arkansas is done through the Secretary Of States Office. You can do it online, cost about $50. I had t0 get a Federal EIN number from IRS. whole process takes about an hour online.  I think the Local Attorneys charge about $250. For the first one I used a local real estate attorney. That was money well spent. I still use his office when I need one.  I am sure each state has different laws.  

I was listening to one of the podcast and the speaker talked about having one LLC as a Property management company. and the houses under another. I started that a couple of years ago. Renter deals with property mgmt. company. Property mgmt. company really owns nothing but leases for houses it rents.

Buy the way , Bigger pockets is my new find. I'm like a kid on candy. I am downloading the blogs to my iphone, I can't go anywhere without listing to the ideas. It's almost like a feeding frenzy. I love hearing about how everyone else looks at the same deals. I am starting to look at my real estate business, a lot different.

One thing to consider, is forming an LLC. The loans in the LLC do not show up on your personal credit report. we have over 40 loans going right now. My personal report is great. don't owe anything but my personal home and viehicle. lol

There are so many different avenues to look at doing a RE deal. My wife has her RE license, but went inactive. so we don't use it. All the costs involved with MlS listing service, brokerage fees . it came down to abut 1.5% of the deal was hers. She refuses to "work for us". lol. Those offers embarrass her I guess.

The Banks have been our greatest asset. in house loans 15 -20 yr amortization. We find the deals, make the offers , get the rehab list,go to bank and walk away with the funds.

I was approached by a hard money lender this week seeking me out. He wants to flip, but the interest is a lot higher than what I have been getting. But The math works. We have been buying and holding.

I like the earn and learn ideas, I like the buy a multi family and let the renters pay your payments. We rehab most of our own, but I can see where I could do a lot more deals with contractors. I just have a problem finding good contractors.

The real tip I can give you is get your education, I buy and read everything I can about real estate, sometimes the second and third read is even better. I get something different every time I read or listen to it. I started with the Carton Sheets "No money down" method. Spent the 400 bucks to get the program. today I buy them on ebay from people who never did anything. (usually around 10 bucks). I have given them to my friends who are never going to do anything also.

One of my best friends has been using his Finance degree's to analyze the deals I do. He has paralysis of analysis. But will never move on the deals. I send him the ones that are close to him.

You can buy and rehab your own home, make equity, rent it buy another and do it again. My son has moved 5 times in 8 years. My wife wont go for that. :)

Sorry for the long post.

Dawn,  Ask your Real Estate Lawyer.

I am no expert. here forming an LLC is $50, can be done online in about 30 minutes. annual taxes are $150. I currently have 3 of them. All different businesses. One is in the form of a trust and then the LLC.

Now for the importance of: If for some reason you get sued. The LLC gets the brunt of the legal action. Not you personally. although they will try to sue you personally. I have been on both side of the legal action. One i won case against llc. judge kicked out personal suit.

The other action was against me. I wasn't covered by a LLC. lets just say 25K later (legal fees) . selling of personal assets to pay those legals, refinancing a home . Do I need to say more. $50 bucks was a very cheap insurance policy. I sure got an expensive education.

Again Let me say 

I AM NOT A LAWYER,  DON"T REPRESENT A LAWYER. AND DO NOT GIVE LEGAL ADVISE.  

 Ginny , mike know his stuff. our first house had 9 dogs in it before the foreclosure. I talked to a professional painter friend. he had me spray a clorox /water  mix on all the walls about knee high down. and spray door frames heavy.  carpet was gone. and so was feces. when I got there, we sprayed, painted and you cant tell it was ever there.  another house had 13 cats In it. cats spray the walls . spray from waist down. again our carpet was replaced.

That day the realtor that showed me the cat house sure was a trooper. She stayed as long as I wanted to inspect the house.  She just closed another one for me last week. We will be doing business for years.