All Forum Posts by: Wesley Davis

Also, never hire hourly subs

If you hire a good GC, they will have all the subs you need so you won't have to find any.  If you still want to look for subs, my recommendation would be to go look for them at supply houses.  Electrician, go to an electrical supply shop and there will be business cards there.  Grab some cards and call away.  Same thing for roofing, or any sub really.  You almost always get better subs that way vs going to lowes or home depot and asking around.  

Now, if you do hire one sub to do something, say a roofer.  He charges you 5500 to do a roof.  Write that down, write how big the roof was, type of shingle used, etc etc.  On the next project, say it's a little smaller of a roof, maybe not as steep of a roof; you can look back at the last project and say that roof costed my 5500.  This one should cost less than that.  Once it's done, write the price down and details, and now you have two projects to go off of.  Eventually you will be able to just glance at something and get a rough number or reference you past projects.

If you pay them cash they probably will do an estimate for you.  Mention that if you do buy the property and use them, if they could deduct the cash you paid for the estimate from the total cost.  They will charge less if you pay cash.  Say 150 dollars for cash vs 200 for anything else.  I personally would be ok with that.  Then they won't feel like you're abusing them, you're at least paying them.   

Bids can take a really long time to do them accurately. 

Are the sub contractors hourly? If they are, that's the first problem.  Tell your General contractor or whoever is managing it to get rid of the hourly subs and get subs that work by contract.  That fixes the urgency problem right there.  If they are contract... well maybe better subs are needed which leads into my next point...

If your area is like here in Asheville, all the good contractors and subs are booked up.  There is so much work for them that they can pick and choose their jobs.  Which leaves the bad contractors, who are also busy, just not as busy.  

In regards to doing one unit at a time.  It's not a bad idea.  It will cost you more money though from the GC's perspective.  Subs that make multiple trips like that versus sitting on a job and finishing it will charge more, as they should if they are good.  On the other hand though, if it will help with the rehab costs that much more it might not be a bad idea.  You're probably limiting your pool of good GCs though by doing that because it is typically harder to manage and in theory would take longer to finish the project that way.   

I cannot stress the hourly worker versus the contract worker enough.  If they charge hourly, that's probably 100% your problem right there.  NEVER hire hourly workers.  Now, sometimes good subs have to charge hourly on remodels, but not normally. 

Investment Info:

Large multi-family (5+ units) buy & hold investment in Johnson City.

6 unit apartment building

What made you interested in investing in this type of deal?

Cash Flow, Financial freedom

How did you find this deal and how did you negotiate it?

Direct Mail

How did you add value to the deal?

Rehabbed each unit, force appreciated it

While I am not from there.  I can tell you this.  Get your NASCLA GC license.  You will be a licensed GC in 14 different states; Arkansas, Alabama, Georgia, Louisiana, Mississippi, Nevada, NC, SC, Oregon, Tennessee, Utah, Virginia, U.S. Virgin Islands, and West Virginia.   However, so im licensed in NC, to get licensed in SC i need to take a 30 question business test.  I don't have to take the actual GC exam though (hooray!).  So i'm sure most states are like that.  It's also a license for residential and commercial (very good, that's what you want).  I can't speak for your area but in NC you need to have 17,000 in cash to get approved.  Really, they just want to make sure you're responsible with money.  If your area has a similar requirement and you don't have that, see if a family member will let you borrow it, then after you get your license they can get it back or invest it in you.   

If you do get the NASCLA license, which I HIGHLY recommend, spend the money and take a course on how to pass the test.  For me, it was about $2,500.00.  Paying for the test, the course to learn to pass, and I unfortunately bought new books, there are 20 books.   You can find them on ebay used for cheaper.  

My Dad was a GC so that's how I got started.  If this will be your main source of income, I would see if you could work for a GC.  Ask him questions and such.  I also would learn how to do a trade, at least a little bit.  You might get that working for a GC though.  Most need someone or a few people to run around doing random things for them.  If you can't do that, I would see about working on a framing crew.  It's hard work, but your young and the experience you would get would be well worth it by the time you're 19-20.  That will give you hands on experience which is INVALUABLE.  All the good GCs that I've dealt with started in the trenches getting hands on experience.  The bad ones that honestly had no idea what they were doing... their jobs were a disaster.  They didn't start that way and just jumped straight into GCing. 

GCs don't know everything, they know a little bit about everything.  Kind of like the CEO of a big corporation.  So don't feel like you need to learn every detail of every trade.  The main thing you need to know is pricing.  If you have your GC license, most subs are nice enough to give you how much they charge per sq ft, linear foot, whatever the way they like charging is.  *******DO NOT EVER HIRE HOURLY WORKERS******.  When they tell you how much they charge, write it down, go home and put it into spread sheets.  When you get your first job, you'll know how to price it.     

Just remember,  people your age do not last long in construction.  So if you can tough it out and show them that you mean business, they'll help you if you're helping them.  

You normally don't have to pay a contractor for an estimate.    A good GC will be able to give you the information that you are looking for as long as that person seems to think you'll hire them to do the work.  If you don't want to actually use the GC for the work, throw him some cash to do the estimate.  Doesn't have to be much, 100-200.  That would keep you in a good name with that person if you needed him in the future.   I would most certainly find one based off of recommendations.  Other property managers might can recommend one.  If you know anyone who has recently had major work done on their house or properties they can give you a recommendation as well.

I would get a GC.  

To answer your question though.  If the demo is TRULY all the way done and done correctly and you have permits and all that...  Typically you would go through and fix any framing or rot.  If there are water problems though, those need to be solved first.  Whether that's a new roof or new gutters, if the fascia is painted and not rotted or being replaced.   Getting the ground water away from the house can help too.  That's kind of a general rule of thumb I personally use but every project is different.  Remodels typically don't have a "set order" in how things are done due to unexpected surprises. 

Almost anything off of Merrimon ave is safe. I can’t give you an exact price without looking at it. I will say with new construction you are looking at roughly 450-550 dollars per fixture. So each sink, water heater, washer, showers, etc are each considered a fixture. That is labor and materials included minus the price of the actual fixtures. Now that is new construction prices so figure that and I would add a few hundred to that and that might get you a ball park figure.

Here in Asheville its 15-25%. Sometimes more if they are really good.  I don't know how hands on you're wanting to be but a good rule of thumb when dealing with labor is the less you pay the more head aches you'll have. So in my opinion I wouldn't beat price down to much.  As an investor though I understand why you would want to beat down price though.  

Good luck with it! Hope all goes well