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J Scott - Author of Flipping/Estimating Book - Ask Me Anything!
Hey everyone!
First, thank you so much for all the support after my recent Podcast episode and the recent BiggerPockets release of the 2nd Editions of The Book on Flipping Houses and The Book on Estimating Rehab Costs. I've gotten a tremendous amount of email and private messages with the kindest of words, and I sincerely appreciate it.
Unfortunately, there's been so many emails and messages that I haven't had the ability to respond to everyone, despite my best attempts. Many of them contained questions -- and I hate not being able to respond to all the questions I get! So, I wanted to start a thread to give everyone an opportunity to ask questions -- and since I get many of the same questions over and over, I thought this might be a good resource for future questions I may get.
Anyway, if you have any questions about the Flipping/Estimating books, about any aspects of real estate strategies, about investing in general, about running a real estate business (or any business), etc., I'm happy to do my best to answer.
There are a lot of tremendously knowledgeable people on this forum, so don't post here if you have a question best answered by the whole community.
But, if you want to address something specifically towards me, this is the place! Feel free to post in this thread and I'll do my best to respond to everyone!
Also note that I created this thread a few years back -- might be worth checking first to see if I've answered it there:
Originally posted by @Eric M.:
Originally posted by @Andrew Syrios:
Originally posted by @J Scott:
Originally posted by @Andrew Syrios:
If you get scarred half to death and then get scarred half to death again, do you die?
Did I miss something???
An extremely stupid joke perhaps.
And not knowing how to spell the word scared killed the joke too
Grammar Nazis kill all jokes though.
Hi: Jay. Can You Help:
I am brand new and just starting out. I am trying to figure out how to make my first deal work and really want to help out this couple. Due to medical reasons a couple came to me looking to sell their house at a discount. They need to walk away from the home. So before their house goes to foreclosure I have been trying to wholesale since Dec. 1. no luck. Info: They owe 101k on house.
Arv 162k
Renno 15k
Contract to me for 105k -Sell price: I started at 118K and moved to 110k. Still no buyers to assign.
With nothing coming from Craigslist, google and REIa: I am trying to be creative. I sampled the market for rentals and found two families in the area who want to rent the house for 1400.00 and entertained the option to buy. One family is on board. I checked rento meter and it came in at 1300 to 1400 so ok with numbers. Did bigger pockets calculater. Numbers are ok. Running on Brandons base line numbers from webinar: . cashflow is 230 pm and cash on cash ROI is 15 percent. My goal was to go back to a few buyers with a package deal haveing a house and it already rented I thought would be a good deal. I am 1.5 hours away so I do not know the area and buyers there at all. So most buyers are in my area adn dont want to manage that far out.
I am getting confused what to do: Ideas. Speak with owner to maybe: assume the loan. I got no cash. I also do not know if the house is sound enough for me to be a new rental owner, then fix it up myself adn get a hard money loan and roll that into the house with an assumed mortgage.
Can you help with some input and ideas? this is getting complicated....My plan was to start with wholesalilng to build some cash. do one or two flips to add more cash and buy one house a year for a rental. I am siked to begin with a rental but I do not have the reserves to pay for repairs and property costs for what ifs. And nervouse with all the other stuff I do not know
Maybe I do a hard money loan for 20k for the rehab and the 5k buffer to cover what ifs in the beginning. At this point a lot of moving parts and not sure. Can you help!
Drew Powers :
Stocks you buy on etrade. How do you invest in horses? Htrade? I should look more into that I have inside info my uncle has spent his career writing about book/articles about horses, and commentates on espn. but I never connected that to an investment vehicle until you mentioned it.
Seems like there are a lot of great investors within a 2 hour drive of me :) Maybe we'll meet some day
Originally posted by @Drew Powers:
Hi: Jay. Can You Help:
I am brand new and just starting out. I am trying to figure out how to make my first deal work and really want to help out this couple. Due to medical reasons a couple came to me looking to sell their house at a discount. They need to walk away from the home. So before their house goes to foreclosure I have been trying to wholesale since Dec. 1. no luck. Info: They owe 101k on house.
Arv 162k
Renno 15k
Contract to me for 105k -Sell price: I started at 118K and moved to 110k. Still no buyers to assign.
With nothing coming from Craigslist, google and REIa: I am trying to be creative. I sampled the market for rentals and found two families in the area who want to rent the house for 1400.00 and entertained the option to buy. One family is on board. I checked rento meter and it came in at 1300 to 1400 so ok with numbers. Did bigger pockets calculater. Numbers are ok. Running on Brandons base line numbers from webinar: . cashflow is 230 pm and cash on cash ROI is 15 percent. My goal was to go back to a few buyers with a package deal haveing a house and it already rented I thought would be a good deal. I am 1.5 hours away so I do not know the area and buyers there at all. So most buyers are in my area adn dont want to manage that far out.
I am getting confused what to do: Ideas. Speak with owner to maybe: assume the loan. I got no cash. I also do not know if the house is sound enough for me to be a new rental owner, then fix it up myself adn get a hard money loan and roll that into the house with an assumed mortgage.
Can you help with some input and ideas? this is getting complicated....My plan was to start with wholesalilng to build some cash. do one or two flips to add more cash and buy one house a year for a rental. I am siked to begin with a rental but I do not have the reserves to pay for repairs and property costs for what ifs. And nervouse with all the other stuff I do not know
Maybe I do a hard money loan for 20k for the rehab and the 5k buffer to cover what ifs in the beginning. At this point a lot of moving parts and not sure. Can you help!
Drew Powers :
Hey Drew - I received your email as well...I'll just respond to that in a bit, as this is a very specific question...
Originally posted by @Account Closed:
Stocks you buy on etrade. How do you invest in horses? Htrade? I should look more into that I have inside info my uncle has spent his career writing about book/articles about horses, and commentates on espn. but I never connected that to an investment vehicle until you mentioned it.
I don't do any stock trading, though I do some options trading. Mostly short term puts to hedge other long investments, so nothing that would make sense to mention...
As for horses, I own a bunch of racehorses with a partner (who has been in the business for a long time). It's a lot more volatile investment than real estate, and not something I would recommend investing in unless you were willing to take some short-term cash swings (monthly costs are pretty high and income isn't steady) and unless you have some other reason for being in the business (I'm a city boy who loves animals and wants my kids to grow up with some experiences I didn't have, so getting to the horses/farm with my kids is a big bonus for me).
Horse have many of the same exit strategies as real estate -- you can buy them, improve their racing form quickly and resell at a profit (flipping), you can race them consistently (once or twice a month) for years and just collect the cash flow from their races (buy-and-hold), you can breed horses and raise them to be racers (development/new construction), you can buy really expensive horses with passive investors (syndication), etc...
Happy to answer any specific questions, but don't want to bore everyone with this topic... :-)
Scott, I don't know if you discuss this in one of your newer books, but I would really appreciate your advice on how I can finance a deal.
Recently the owner of a property in Wheaton MD about 15 minutes of brisk walk to the metro station is trying to sell me his house and he wants to sell it quick this Spring. The house was built in the '60s with 8 rooms, 3 baths this house but one of the room is not a legal bedroom i.e. no egress. IN the property's current condition, each room brings $500 to $600 so the total rents I could get is around $4000/month. The for-sell-by-owner guy is asking for $370,000 and since he will not need to pay any commission fees there could be some more room for the price to go down. Property tax is $3500 for 2019. This is a solid, split foyer house with good drainage but the kitchen is dated and bathrooms look old. A good renovated house with 4 beds 3 baths in this neighborhood was sold for close to $460,000.
1. Do you think this could be a candidate for wholesaling?
2. If not, should I buy it as a rental property? BTW, in general, does the 2% rule apply in the DC Metro area? Maybe Russell Brazil and others familiar with this market can chime in here?
I can come up with $170,000 in cash (that is by taking a home equity loan on my residence home), but don't know how to finance the rest.
Thanks so much, Scott and everyone in advance!
@J Scott I live in Winnipeg, Canada. Do you think your estimations work up here or will I have to adapt them to fit my market?
Originally posted by @Dave Allen:
@J Scott I live in Winnipeg, Canada. Do you think your estimations work up here or will I have to adapt them to fit my market?
Hey Dave - Unfortunately, I know absolutely nothing about the Canadian market, so I don't know if the price ranges in the Estimating book are close or not. Sorry...
That said, the methodology for putting together your SOW and getting bids should be applicable in any market, so even if the price ranges are off, it should help to learn the process of estimating.
Originally posted by @Huong T Nguyen:
Scott, I don't know if you discuss this in one of your newer books, but I would really appreciate your advice on how I can finance a deal.
Recently the owner of a property in Wheaton MD about 15 minutes of brisk walk to the metro station is trying to sell me his house and he wants to sell it quick this Spring. The house was built in the '60s with 8 rooms, 3 baths this house but one of the room is not a legal bedroom i.e. no egress. IN the property's current condition, each room brings $500 to $600 so the total rents I could get is around $4000/month. The for-sell-by-owner guy is asking for $370,000 and since he will not need to pay any commission fees there could be some more room for the price to go down. Property tax is $3500 for 2019. This is a solid, split foyer house with good drainage but the kitchen is dated and bathrooms look old. A good renovated house with 4 beds 3 baths in this neighborhood was sold for close to $460,000.
1. Do you think this could be a candidate for wholesaling?
2. If not, should I buy it as a rental property? BTW, in general, does the 2% rule apply in the DC Metro area? Maybe Russell Brazil and others familiar with this market can chime in here?
I can come up with $170,000 in cash (that is by taking a home equity loan on my residence home), but don't know how to finance the rest.
Thanks so much, Scott and everyone in advance!
First, are you confident that it's legal to rent the property by the room? This will be location dependent -- in some areas, there is a cap on the number of non-related people who can share a house. You should verify this before moving forward, as it could impact your strategy and the value of the property to an investor.
Regarding your specific questions:
1. If it's generating $4000/month and can be acquired for $370,000 in that area, it's probably a wholesale candidate. I imagine there are investors around there who are willing to buy properties that exceed 1% in income. I could be wrong, but Wheaton is a popular area for investors.
2. You won't find too many 2% properties in the DC metro area these days. 1% is still pretty good for around here. As for whether you should buy it, it depends on whether it helps you get closer to your goals or not. This is going to be a personal question that only you can answer.
As for financing, does the seller have any equity? Can they provide some seller financing? Subject to?
Can you get a bank loan?
Can you get a private loan?
Do you know anyone who may be interested in partnering and can provide cash?
Originally posted by @Drew Powers:
Hi: Jay. Can You Help:
I am brand new and just starting out. I am trying to figure out how to make my first deal work and really want to help out this couple. Due to medical reasons a couple came to me looking to sell their house at a discount. They need to walk away from the home. So before their house goes to foreclosure I have been trying to wholesale since Dec. 1. no luck. Info: They owe 101k on house.
Arv 162k
Renno 15k
Contract to me for 105k -Sell price: I started at 118K and moved to 110k. Still no buyers to assign.
With nothing coming from Craigslist, google and REIa: I am trying to be creative. I sampled the market for rentals and found two families in the area who want to rent the house for 1400.00 and entertained the option to buy. One family is on board. I checked rento meter and it came in at 1300 to 1400 so ok with numbers. Did bigger pockets calculater. Numbers are ok. Running on Brandons base line numbers from webinar: . cashflow is 230 pm and cash on cash ROI is 15 percent. My goal was to go back to a few buyers with a package deal haveing a house and it already rented I thought would be a good deal. I am 1.5 hours away so I do not know the area and buyers there at all. So most buyers are in my area adn dont want to manage that far out.
I am getting confused what to do: Ideas. Speak with owner to maybe: assume the loan. I got no cash. I also do not know if the house is sound enough for me to be a new rental owner, then fix it up myself adn get a hard money loan and roll that into the house with an assumed mortgage.
Can you help with some input and ideas? this is getting complicated....My plan was to start with wholesalilng to build some cash. do one or two flips to add more cash and buy one house a year for a rental. I am siked to begin with a rental but I do not have the reserves to pay for repairs and property costs for what ifs. And nervouse with all the other stuff I do not know
Maybe I do a hard money loan for 20k for the rehab and the 5k buffer to cover what ifs in the beginning. At this point a lot of moving parts and not sure. Can you help!
Drew Powers :
Hey Drew,
I responded to your email, but figured I'd post my response here as well, in case it helps anyone else...
-----------------
If you can’t find anyone interested through Craigslist or local REIAs, is it possible the deal isn’t as good as you think? Perhaps needs more than $15K worth of work? Or perhaps won’t rent for as much as you think?
If you’re confident it’s a good deal and you want to buy it, talk to the owners and see if they’re willing to do a sub-to type deal so that you only need to come up with the rehab costs. This is win/win for both sides and can be a great way to start your portfolio.
If you're interested in wholesaling, perhaps try listing on BP. Have you advertised through the Southern Maryland REIA?
Another option is to get it under contract with sub-to, and then owner finance it to another buyer. Collect 10-20% down and monthly payments. Use the payments to pay the mortgage, and any difference is yours to keep. Of course, this would depend on the mortgage details and whether the numbers worked out, but it’s an option.
I would start by talking to the homeowners and see what they are willing to do with respect to Subject-To financing…
Originally posted by @J Scott:
Originally posted by @Huong T Nguyen:
Scott, I don't know if you discuss this in one of your newer books, but I would really appreciate your advice on how I can finance a deal.
Recently the owner of a property in Wheaton MD about 15 minutes of brisk walk to the metro station is trying to sell me his house and he wants to sell it quick this Spring. The house was built in the '60s with 8 rooms, 3 baths this house but one of the room is not a legal bedroom i.e. no egress. IN the property's current condition, each room brings $500 to $600 so the total rents I could get is around $4000/month. The for-sell-by-owner guy is asking for $370,000 and since he will not need to pay any commission fees there could be some more room for the price to go down. Property tax is $3500 for 2019. This is a solid, split foyer house with good drainage but the kitchen is dated and bathrooms look old. A good renovated house with 4 beds 3 baths in this neighborhood was sold for close to $460,000.
1. Do you think this could be a candidate for wholesaling?
2. If not, should I buy it as a rental property? BTW, in general, does the 2% rule apply in the DC Metro area? Maybe Russell Brazil and others familiar with this market can chime in here?
I can come up with $170,000 in cash (that is by taking a home equity loan on my residence home), but don't know how to finance the rest.
Thanks so much, Scott and everyone in advance!
First, are you confident that it's legal to rent the property by the room? This will be location dependent -- in some areas, there is a cap on the number of non-related people who can share a house. You should verify this before moving forward, as it could impact your strategy and the value of the property to an investor.
Regarding your specific questions:
1. If it's generating $4000/month and can be acquired for $370,000 in that area, it's probably a wholesale candidate. I imagine there are investors around there who are willing to buy properties that exceed 1% in income. I could be wrong, but Wheaton is a popular area for investors.
2. You won't find too many 2% properties in the DC metro area these days. 1% is still pretty good for around here. As for whether you should buy it, it depends on whether it helps you get closer to your goals or not. This is going to be a personal question that only you can answer.
As for financing, does the seller have any equity? Can they provide some seller financing? Subject to?
Can you get a bank loan?
Can you get a private loan?
Do you know anyone who may be interested in partnering and can provide cash?
Only 5 unrelated adults can live together in that location. (Montgomery County, PG County...DC allows 6).
Based on the desription of the house, I would expect 2300/2350 a month in rent. I own 2 rentals fairly close to there just a little bit north on Georgia and on the east side. One is up for rent right now, $2800 a month, and its completely updated and much larger than a split foyer. I can tell you from experience, occupancy limits are one of the few things you can actually get in trouble for in MoCo. Certain cultural backgrounds are going to have multigenerational families, thus more adults. My rentals with people of those cultures, the neighbors call the county on me, and I have to go meet the housing inspector for them to check the place out. Its happened to me a variety of neighborhoods, Rockville, Gaithersburg, Silver Spring, Burtonsville. It is the extra cars that bother the neighbors.
By and large expect rents to come no where close to 2%, or even 1%. 0.67% is the ratio to be expected in Montgomery County on SFH. On very cheap condos, you can get close to 1%. In DC, on something very expensive, large, in a primo area and rented by the room, you could push 1% if you ignore occupancy limits, which I know people who do, but by and large you will be looking at 0.5% in DC. PG County, 0.75%. Southern part of PG ratio will be a little higher on the cheaper properties. The only place close by you will get 2% would be in parts of Baltimore. You can get to 3 or 4% in parts of Baltimore. Yield though is a measure of risk in the asset or market. So these properties that rent for 4% of the properties value, should be viewed as some of the riskiest assets perhaps in the country.
Scott and Russell:
Thanks so much for your replies, both are highly educational and informative about financing.
Now the occupancy limits changes the whole equation. Hmmmm....
Scott and Russell: your replies are both highly educational and informative, NOT just about financing.
Originally posted by @Russell Brazil:
Originally posted by @J Scott:
Originally posted by @Huong T Nguyen:
Scott, I don't know if you discuss this in one of your newer books, but I would really appreciate your advice on how I can finance a deal.
Recently the owner of a property in Wheaton MD about 15 minutes of brisk walk to the metro station is trying to sell me his house and he wants to sell it quick this Spring. The house was built in the '60s with 8 rooms, 3 baths this house but one of the room is not a legal bedroom i.e. no egress. IN the property's current condition, each room brings $500 to $600 so the total rents I could get is around $4000/month. The for-sell-by-owner guy is asking for $370,000 and since he will not need to pay any commission fees there could be some more room for the price to go down. Property tax is $3500 for 2019. This is a solid, split foyer house with good drainage but the kitchen is dated and bathrooms look old. A good renovated house with 4 beds 3 baths in this neighborhood was sold for close to $460,000.
1. Do you think this could be a candidate for wholesaling?
2. If not, should I buy it as a rental property? BTW, in general, does the 2% rule apply in the DC Metro area? Maybe Russell Brazil and others familiar with this market can chime in here?
I can come up with $170,000 in cash (that is by taking a home equity loan on my residence home), but don't know how to finance the rest.
Thanks so much, Scott and everyone in advance!
First, are you confident that it's legal to rent the property by the room? This will be location dependent -- in some areas, there is a cap on the number of non-related people who can share a house. You should verify this before moving forward, as it could impact your strategy and the value of the property to an investor.
Regarding your specific questions:
1. If it's generating $4000/month and can be acquired for $370,000 in that area, it's probably a wholesale candidate. I imagine there are investors around there who are willing to buy properties that exceed 1% in income. I could be wrong, but Wheaton is a popular area for investors.
2. You won't find too many 2% properties in the DC metro area these days. 1% is still pretty good for around here. As for whether you should buy it, it depends on whether it helps you get closer to your goals or not. This is going to be a personal question that only you can answer.
As for financing, does the seller have any equity? Can they provide some seller financing? Subject to?
Can you get a bank loan?
Can you get a private loan?
Do you know anyone who may be interested in partnering and can provide cash?
Only 5 unrelated adults can live together in that location. (Montgomery County, PG County...DC allows 6).
Based on the desription of the house, I would expect 2300/2350 a month in rent. I own 2 rentals fairly close to there just a little bit north on Georgia and on the east side. One is up for rent right now, $2800 a month, and its completely updated and much larger than a split foyer. I can tell you from experience, occupancy limits are one of the few things you can actually get in trouble for in MoCo. Certain cultural backgrounds are going to have multigenerational families, thus more adults. My rentals with people of those cultures, the neighbors call the county on me, and I have to go meet the housing inspector for them to check the place out. Its happened to me a variety of neighborhoods, Rockville, Gaithersburg, Silver Spring, Burtonsville. It is the extra cars that bother the neighbors.
By and large expect rents to come no where close to 2%, or even 1%. 0.67% is the ratio to be expected in Montgomery County on SFH. On very cheap condos, you can get close to 1%. In DC, on something very expensive, large, in a primo area and rented by the room, you could push 1% if you ignore occupancy limits, which I know people who do, but by and large you will be looking at 0.5% in DC. PG County, 0.75%. Southern part of PG ratio will be a little higher on the cheaper properties. The only place close by you will get 2% would be in parts of Baltimore. You can get to 3 or 4% in parts of Baltimore. Yield though is a measure of risk in the asset or market. So these properties that rent for 4% of the properties value, should be viewed as some of the riskiest assets perhaps in the country.
The house is filled up with tenants, including one in the illegal bedroom. Up to this point, the owner's parents stay in 2 of the 8 rooms and they manage the property on behalf of the owner who resides in FL, so it brings around $3000 a month but unlike them, I do not have any plan to go against the occupancy limits. I used to rent one room in that house many years ago when I first moved to Wheaton and paid $600/mo back then. The owner's father is getting very sick so he wants to sell the house and move his parents to FL so that he can take care of them.
Sorry if I bore everyone to death here.
I have just checked with MoCo, and they sent me this piece of information, and told me this is the only rule they go by.
Description: The size of the dwelling is used to determine whether it is overcrowded. There must be 150 square feet for the 1st person and 100 square feet for each additional person. Please note that if the dwelling has been inspected within the last 6 months and found to be in compliance with regard to overcrowding standards, a case will not be opened. See Section 26-5(a) on attached link for the Code reference.
So looks like we are back to a projection of $4000/mo in rents for a $370,000 property.
Rockville and Gaithersburg have their own rule, i.e no more than 5 unrelated people staying at a single property.
Originally posted by @Huong T Nguyen:
Sorry if I bore everyone to death here.
I have just checked with MoCo, and they sent me this piece of information, and told me this is the only rule they go by.
Description: The size of the dwelling is used to determine whether it is overcrowded. There must be 150 square feet for the 1st person and 100 square feet for each additional person. Please note that if the dwelling has been inspected within the last 6 months and found to be in compliance with regard to overcrowding standards, a case will not be opened. See Section 26-5(a) on attached link for the Code reference.
So looks like we are back to a projection of $4000/mo in rents for a $370,000 property.
Rockville and Gaithersburg have their own rule, i.e no more than 5 unrelated people staying at a single property.
The person who gave you the information is wrong. The problem with that, is that even when a government employee gives you the wrong information, you are still liable.
I go through these housing inspections at least once per year, and they count the beds, they count the cars etc.
Below is a link to the MoCo Housing Code book. Page 5. No more than 5 unrelated people may live together in a dwelling unit.
Id also suggest reading the MoCo Landlord Tenant Handbook.
housing code - Montgomery County
PDFMontgomery County MD (.gov) › code
Originally posted by @Russell Brazil:
Originally posted by @Huong T Nguyen:
Sorry if I bore everyone to death here.
I have just checked with MoCo, and they sent me this piece of information, and told me this is the only rule they go by.
Description: The size of the dwelling is used to determine whether it is overcrowded. There must be 150 square feet for the 1st person and 100 square feet for each additional person. Please note that if the dwelling has been inspected within the last 6 months and found to be in compliance with regard to overcrowding standards, a case will not be opened. See Section 26-5(a) on attached link for the Code reference.
So looks like we are back to a projection of $4000/mo in rents for a $370,000 property.
Rockville and Gaithersburg have their own rule, i.e no more than 5 unrelated people staying at a single property.
The person who gave you the information is wrong. The problem with that, is that even when a government employee gives you the wrong information, you are still liable.
I go through these housing inspections at least once per year, and they count the beds, they count the cars etc.
Below is a link to the MoCo Housing Code book. Page 5. No more than 5 unrelated people may live together in a dwelling unit.
Id also suggest reading the MoCo Landlord Tenant Handbook.
housing code - Montgomery County
PDFMontgomery County MD (.gov) › code
You are correct! I saw that provision now.
Thanks so much!
Well, in that case, I will pass!
@J Scott - How are you so awesome?
-
Real Estate Agent Illinois (#471.018287) and Wisconsin (#57846-90)
- http://www.MidwestRESummit.com
- Podcast Guest on Show #132
Originally posted by @Brie Schmidt:
@J Scott - How are you so awesome?
I surround myself with awesome people... like you!!! Makes me look better...
@J Scott Loved the show and The Book. Keep Greatness Going! Looking to learn all I can from BP and from Real Estate
Hi J,
Just out of curiosity, when you’re handling many flips simultaneously, what do you use to keep yourself organized? Are you keeping track of all your buying, selling, fixed and rehab costs through software like Quickbooks or are there other tools you find more useful? I’ve only been able to get to 2 at a time and although I have many different spreadsheets, it starts to get a little crazy. I can’t imagine doing 5-10 at a time but that’s where I ultimately want to get to. Any advice on this?
Matt, give me a shout on FB. I use Quicken. It's easy to set up. I'm doing a house in Pine Beach right now. I forgot you were doing this, too!! I'm actually looking for someone else to buy in, but if not that one, I have a lead on another.
Originally posted by @Matthew Rembish:
Hi J,
Just out of curiosity, when you’re handling many flips simultaneously, what do you use to keep yourself organized? Are you keeping track of all your buying, selling, fixed and rehab costs through software like Quickbooks or are there other tools you find more useful? I’ve only been able to get to 2 at a time and although I have many different spreadsheets, it starts to get a little crazy. I can’t imagine doing 5-10 at a time but that’s where I ultimately want to get to. Any advice on this?
Hey Matt -
All my organization is between Quickbooks and custom spreadsheets. It took a long time to develop my "system" for managing things, and it probably wouldn't work for everyone else, but it works for me. For me, the key is to track progress a little bit everyday as opposed to trying to figure out where things are every few days or weekly. Things pile up fast, and if you skip a day of tracking progress, you can get confused quickly.
Also, define very specific checkpoints in your projects, and track budgets, schedule and quality to those checkpoints. This allows you to track everything around milestones, which forces some organization.
At some point I'll write/talk more about this... I think I need to organize my thoughts... :)
Originally posted by @Kevin Polite:
@J Scott pros and cons of new construction vs. rehabs
First, I don't generally recommend people start building new construction right now. In most markets (in my opinion), things are trending down -- or will be soon -- and new construction is the first to take a hit when it comes to sales and transaction volume.
That said, here is what I like/dislike about new construction...
PROS OF NEW CONSTRUCTION
- Budgets are easier to forecast (fewer surprises)
- Schedules are easier to forecast (fewer surprises)
- ARVs are easier to forecast
- Can often get a contract before construction is completed
- Contractors on these projects are typically more reliable
- Overall, a lot less stress and headaches
CONS OF NEW CONSTRUCTION
- Much longer life-cycle (adds more market risk)
- Higher out of pocket costs
- Financing can be more difficult
- Requires more skill/knowledge
- Requires much more attention to detail
- Generally lower IRR (due to length of projects)
Personally, I'd rather do a new construction project over a big rehab any day -- the lack of surprises and the better contractors make the entire project more enjoyable. But, there is certainly more work involved and more risk at certain points in the market cycle.