A Horror Story/ Turned Ok Thanks to BP

[Jeremy Tillotson]

BP has been great to me. To start I am a contractor and a investor. I started off this year by entering into a JV deal to purchase a home at a great price. The home needed work but 5-8k was all. Before everyone including me would say thats not realistic lets talk about my unique setup. The OP purchased the home, I was to serve as boots on the ground and GC. I was doing work at cost, using my own employees (not subs) which tends to control cost much better. we would split profits on the back end. I have been a contractor and investor for many years and done hundreds of deals, we have have some that well just suck. This house appeared to need new siding and flooring/paint, and updated bathroom. It had been empty for some time. We started this project by the furnace going out, as also an HVAC I fixed this for a few hundred dollars and was no big deal overall. Then we went to turn on the water, and the lines had broken under the slab, with he design of the home to only way to fix this was to jackhammer up the slab, which before we were done resulted in a gutted kitchen and bathroom with 4 yards of new concrete needed. Cost overrun became an understatement of the universe. I had a great partner in this and after talking we deiced to fix it up even nicer and market this to a retail market(we were going to sell as a turnkey). Turning this lemon into lemonade was not easy, our initial all in cost was to be around 25k (on a bad day we thought) well 38k later we had a finished product. Which oddly was a projected selling price. After the realtor fees, and concessions we made about a 12% return which needed to be split to further add insult. By this time we had developed a trusting friendship and done other deals, so I agreed to let him keep the profit on this deal. I think a few things come to mind from this, had either of us done this without the other we would have lost incredible amounts of money, the contracting could have easily been double if he had contracted this out, while if I had a hard money loan, or even done this from savings I would have run out of money. I think this demonstrates the power of two is greater than its sum, and it also illustrates why trust in partners is essential. Finally I think it solidified our agreement to continue a unique setup I hope more will consider.