All Forum Posts by: Bill Hinshaw

I agree on the inspection and the appraisal. You may have to disclose the inspection when you sell, so keep that in mind. 

You might also see if the seller will have his/her insurance adjuster out to inspect the roof, and you pay the deductible if the house needs a new roof. If possible, have your roof guy there when the adjuster is there. They can make sure the adjuster sees everything that is wrong. I did this on my last house and the settlement amount from the insurance company was enough to cover the cost of the new roof (no funds were necessary for the deductible). 

Great job Joe! Of all the awesome things you did for that house, the pull-out pantry stood out to me. That is a really nice feature for small kitchens where the big walk in pantry isn't an option. Nice use of space. I could really use that in the house I am working on now. 

Congrats and welcome! Starting young is a huge advantage for you. Hope to see you reach your goals!

That is a great little house. Great job on the rehab. I really like the stair well and the back yard looks like a really nice space. I would have had to add an outdoor living area coming off that back door. Was that something you considered? Obviously you got the price you wanted, so you made the right choice.

Congrats @Alex Applebee. It speaks volumes that you were able to take on a project this large and complete it successfully at 26 years old with no prior experience. 

I'm currently working a project similar in scope - I can relate to what you were saying about the mental and emotional roller coaster when you are in the middle of it. Congrats on winning that battle. I also appreciate what @Jay Hinrichs identified - always important to develop, recognize and utilize your competitive advantages.

What you are proposing is admirable. I can't see any reason why you shouldn't.

Another idea... what about partnering with her to ward off foreclosure on remaining properties, get them rehabbed, rented and properly managed in exchange for 50% equity. Would the numbers make sense to pursue that (and are your pockets deep enough :))? In the long run, it could be more beneficial for both of you than what you are proposing. You are helping solve her problem for one property... could you help solve her problem on all the properties?

I'm at about $40/sf on a pretty substantial rehab that involved changing the layout, replacing almost all of the electrical, adding a bathroom through slab foundation, foundation issues, roof replacement, adding a driveway, and full cosmetic overhaul. My contractor is a partner in our business, so that price does not include any GC costs.

This is our first project and it is massive, so I understand your hesitation. I would not discourage you from taking this on. A couple of things we've done that have kept the pressure low. One - we used really cheap financing. No hard money payments beating down on us each month. For you, that could be your own cash, a HELOC, or someone you know willing to take a lower return. Two - we recognized going in that this was going to take longer than it should. Yes, we set a schedule, but with the understanding that we had a lot to learn. We are in our 5th month and just now starting to see the light at the end of the tunnel.

The advantage with a project this large is that you learn a ton about rehab, costs, finding good sub-cons, etc. It sets you up for success moving forward.

One big piece of this - the market has moved greatly in our favor during our holding time, and we will likely make a great return on this project. If the opposite were true, I might have a much different outlook and different advice for you. Having a positive financial outcome has a huge impact on your outlook and motivation to move forward. Could your business survive if you take on something this large and lose money? Something to consider.

Wow what a project! @Troy Sheets What do you think this property could be worth? I wish I could work with the investor on this one to see how it changes over time. Congrats!

Go get the general construction permit. Talk to them. Ask them specific questions. Be receptive. Gain their trust. My experience is that these guys are pretty easy to work with as long as you are playing by their rules. She probably has you pigeon holed as another flipper trying to skirt the code... be the opposite.

I was terrified of permitting when starting out. I expected one road block after another. It wasn't near as bad as what I was expecting.

Let us know how it goes. 

@Jay Hinrichs

When you do these deals, do you fund them with your own cash, or do you work with lenders? I'm assuming you are funding with your own cash, because I'm not sure it makes sense that your partner would be willing to pay interest on a note AND pay you a % of profits. I guess it all depends on how the JV is structured.

I'm curious because I could potentially work with someone like  @Jim Stoffey, but I only have enough cash to fund 1 or 2 deals at a time. I would need to find a lending source to scale up. It's not something I'm seriously considering at this time. I need more experience to be able to add value for someone like Jim. I'm just curious.