All Forum Posts by: Amy Solomon

I've been working towards this for years!! But now that I am here, I'm scared.

I have 80 k cash and 30k in credit. Don't know if I will pay cash or Get a loan.

Biggest concern at the moment is calculating the numbers correctly. Like what percentage are closing costs usually? I don't really know what it's going to costs until I've done a few flips. So is it ok to go with the 10-15-20 sq ft rehabs concept?

I've read the j Scott estimating rehab costs. But I'm still unsure.

What do you suggest?

HELLO!

We need a homepath or conventional loan ASAP. Special circumstances:

husband 0 dti and 70k income credit 620

wife 100% dti and 710 credit (therefore wife not on loan? Although wife would like to have her 710 considered if any bank doesn't just take the lowest person's score)

husband has short sale 2 years ago and voluntary repo 1.5 years ago

no foreclosures or bankruptsies

we did a haffa short sale on the old house with special circumstances due to being transferred. New credit history has been built in the last 1.5 years for husband with stable w2 income and credit cards.

20% down for conv. 10% down for home path

We have another $80,000 of income that we make that's not on the tax return if AND lender would consider part stated income and part w2 income. We can provide bank statements.

We have tenant in our primary home for 2 years, and a lease for 3 years not on return if any bank will consider that income.

We will have a income apartment on the new property if any bank will consider that income.

Loan amount desired is $330 to $400k

If you think you can help me, please let me know. We have a home we love and would like to make an offer on.

THANK YOU!

Thanks...but also it's not just about the contractor and their time. I do value what they bring to the table...should they pan out to be 5 stars.....but a brand new contractor that I am meeting for the first time....I need to know they are worth the "investment" and I don't yet...never even met them and I've no idea of their experience, expertise, ability or even if they are properly licensed or insured. So I'm still leaning towards initial meeting, I won't charge them for my time, and they shouldn't charge me for theirs...let's meet, get to know each other briefly, look at the house, show me what you know and I will show you what I know...give me an estimate...THEN and ONLY then will I know if this guy knows what he's talking about and are his prices reasonable. Should that house fall through, and I"m hooked on the guy from our initial meeting then moving forward I wouldn't mind paying a reasonable fee for a total renovation bid due to the last one not panning out....but again...first meeting...I think we are both checking each other out...for free.

That's my opinion...but, I will go in with an open mind and I won't necessarily disqualify meeting/getting bid from a new contractor just because he charges a fee...but I will need to be cautious that I am not throwing $100 at a shady unlicensed uninsured GC or a handyman posing.

If I can't get a GC to come and look at a property and give me a bid on it before I put in an offer, (because another thread suggest they all charge for this) then how will I really make sure that I am in the right ball park for "guessing" the right cost to renovation.

My experience has always been with renovate and hold, so spending a little more than I thought I would on a renovation wasn't such a big deal at the time. Now that I am trying to flip 8 houses a year as a start to a CAREER, every dollar counts and needs to be accounted for.

I have J Scotts book on estimating...but does anyone else have some suggestions? I could always do the whole $10 - $15 - $20 per sq ft estimate until I have done a few flips with and have a relationship with a contractor to the point in which he'd come check out my property before I make an offer.

What would you do? Kinda new, kinda experienced...but need some insight.

Moe, yes, definitely not a FRIEND. Someone I've seen socially once, and who taught my kids to swim, this PERSON's husband. IF it were a true friend I would hope they wouldn't charge me $150 to come to a 1100 sq ft home that is 15 min from their house for 30 minutes.

I am also from central florida, never paid contractors there for estimates. So I guess I will move onto my next question and start a new thread....

If I can't get a GC to come and look at a property and give me a bid on it before I put in an offer, then how will I really make sure that I am in the right ball park for "guessing" the right cost to renovation.

My experience has always been with renovate and hold, so spending a little more than I thought I would on a renovation wasn't such a big deal at the time. Now that I am trying to flip 8 houses a year, every dollar counts and needs to be accounted for.

I have J Scotts book on estimating...but does anyone else have some suggestions? I could always do the whole $10 - $15 - $20 per sq ft estimate until I have done a few flips with and have a relationship with a contractor to the point in which he'd come check out my property before I make an offer.

What would you do? Kinda new, kinda experienced...but need some insight.

@Terry Portier

I don't think this thread is relevent to what you are talking about. I am sure there are medium to large GC firms out there who have the man power and expertise to target huge accounts....and only huge accounts. I wouldn't go to someone who builds 200 home developments and try to get a bid on my $20,000 renovation. So I think that your kind of company and the examples you share are irrelevent on this thread, and probably in this entire forum as well.

I am talking about regular GC around town, who WANT clients, like clients, value clients etc. Not every REI is donald trump, and not every GC is a big baller like you apparently claim to be.

I'm not asking someone for a 5 hour home inspection and walk through. I am talking about up to 1 hour at most, going through the house deciding what's to get done (or informing the gc what's to get done) having a short dicussion on their recommendations if they are different from my initial plan, and then submitting a bid on the work we discussed. It's less than an hour of time, and if their prices are fair, they are respectful, helpful, positive and can build a good rapport with me (and they check out) they will get business from me....even if they need to give me 2-3 more bids before we find the right project.

I don't think a GC who's int he business of doing $10,000-$50,000 renovations should be charging for his bids. I need to know how much something is going to cost before I can hire someone, plain and simple.

Lots of on topic info here, thank you, I appreciate that. I think I will stick to working with someone who is willing to take a "chance" on me that I am a real REI who has jobs for them, just as I am willing to take a chance on them, that they are capable and can deliver...until we have a couple projects under our belt together....we are BOTH taking a chance on each other....not just the GC on me. After all, the GC could be wasting my time just as much as I could be "wasting theirs".

Contractors know that investors are a waste of their time? Better a home owner who does one renovation every 20 years than an investor who does 8 per year? Wow, an interesting concept. So 8 total home renovations per year isn't worth it to them to give me free bids? And a little free advise along with the bid? I mean normally a contractor you plan on working with long term....the advise comes free....as he better tell you NOW that roof repair isn't going to cut it, that the whole roof needs replacing instead....better to tell you now then later no? And the advice SHOULD come freely if they want a good relationship. I mean why not tell me you know of a material that will have the same look at half the price? These are just a small example of "advice" conversations that happen during a walk through for a bid. SO to charge me $150 to come and tell me how much it will be, and to build our relationship....that just doesn't sound right to me. Never paid for a bid before. Only the AC guy have I paid to just show up.

With our old contractor, years ago, we'd walk through a property right before we placed the bid, so we could see if my calculations for the renovation were on spot. He'd give me ideas, show me ways we could avoid/save etc. And he'd also advise me on anything he saw that just didn't look right....he kinda kept me on track and made sure I knew what would be involved etc.

I'd then close on the house, one house or another, mostly we did 2-3 walk throughs per 1 house purchase as the negotiations don't work out on every deal of course. He'd do the work, get paid, then on to the next house.

Someone I had intended on using as a contractor now, since I"ve been out of the game for a while, and this is the husband of someone I know fairly well, has just told me they will charge me for a walk through if I use them as my contractor.

Is this customary? It doesn't seem so. I've never had to pay a fee for that before. They get the project we end up buying, they make their money that way.

What are your thoughts?

I guess I want a proposal so they can see I am serious. Also because one of the family members is extended family, and an attorney himself, a really really good one. I want to be taken seriously. I am the baby of the entire family and I'm trying to squeeze out of that mindset.

Plus, my thought was I could get it written, and it might be a good foundation for me to have when I have a few more flips under my belt and I am looking for money outside the family.

Do you know of any sample templates or proposals on how it should be laid out?

I think there is some misunderstanding. My business plan is complete. These proposed investments are not for strangers or investors. It's for my close family, parents, inlaws, uncle (i'm his heir) etc. In many cases this is merely an "advance on inheritance". I think these loan terms are very fair, and I think that each family member can choose which loan option they like as well as negotiate any terms.

I'm not totally NEW to the game here. I've got several successful deals already under my belt. I also didn't mention anything about not having any skin in the game. And surely, if I take out a HELOC or similar loan, that IS SKIN IN THE GAME. Not to mention my own cash which I didn't talk about because that has nothing to do with the question.

7% on a heloc or 2nd? If my first is 3.5%, 7% seems just about right for a home with steadily increasing values and over $110k in equity. I can check rates...but that seems pretty good to me for a secured loan. I'm willing to go up of course, but 7%-9% that wasn't the topic of this thread.

I was asking if anyone has experience writing an investment proposal, how are they written, where can I find a sample etc.