Seattle Investor, long time BP listener, new to site

[Jeremy Benezra]

Hi everyone,

I've been listening to BP for awhile and decided to see what online content there is. The forum is great! Excited to browse all the topics.

I started out as a retail General Contractor doing projects for customers. Quickly I got into real estate and have been doing my own projects, purchasing houses in the greater Seattle area at the foreclosure auction and flipping them or turning them into cashflow rentals. I own 4 rentals and I have 3 flips going currently (1 I just started, 1 almost complete, 1 listed for sale).

I am looking into commercial properties as my next step. I'd like to identify a property, gain approval from a lender, and make an offer on the property.

My other interests are rockclimbing, hiking, camping, and building my own A-frame cabin near Stevens Pass ski area.

I look forward to meeting all of you and reading up on your tidbits of knowledge!

Thanks,

Jeremy

[Ryland Taniguchi]

Welcome to BP. It seems like a bad time to start in commercial real estate. All of the smart commercial investors I know have been sitting on the sidelines waiting for the market to crash or correct.

GC is a great background. It is virtually suicidal for a good GC to work with investors on residential flips. Most of the experienced rehabbers I know are paying $75 per sq ft on a "gut out" and $35 per sq ft for a cosmetic rehab. It was only 4 years ago where I remember paying $35 per sq ft for a gut out and $12 per sq ft on a cosmetic.

There are no good GC for investors because investors want to pay half price of what it costs to run the construction. So all the good GC stay away from investors that want to underpay. 

Investors generally want to pay for direct labor and direct materials and not pay for the contractor risk (OSHA, aebestos, LNI, litigation, construction defect risk management, lead based paint, surprises, injuries, etc.) 

Seems like most investors want to overpay for a deal and then blame the contractor for their woes. 

All this being said, on rehab projects I moved to hiring GC and let them underbid their risk management. I find it is way cheaper than being my own GC and subcontracting. I would rather pay top dollar and let the GC take all the risk and have the attorneys keep them in check for timelines with contract documents.