All Forum Posts by: Nick Richards

Quote from @Ryan Thomson:

@Nick Richards  Here are some resources I found really helpful on my journey:

1. For podcasts I really like the House Hacking episodes on Bigger Pockets Podcast and other channels. Here is a playlist with the best House Hacking Podcasts I’ve found: https://open.spotify.com/playlist/4A6uLsPfdWEMmJhG4TSjyb?si=743bb403548f47fb

2. Great beginners guide: https://www.biggerpockets.com/blog/wp-content/uploads/2022/08/Ultimate_Beginners_Guide_BiggerPockets.pdf

3. The Book on House Hacking Strategies by Bigger Pockets is also a fantastic book

4. Happy to talk if you want more advice

5. Connect with a realtor who understands house hacking and has invested themselves

6. Connect with a lender to see what you qualify for and how you can improve that situation

7. Go to local Real Estate meetups and learn from people there

The thing that worries me is that I have not bought anything on credit for years, I mean last loan I took out was in 2008. 

And I have always paid my way in cash so I pretty much have zero credit history. 

Thank you for the other things you have thrown in there, I am going to look into them.

Go down to home depot, they have a library section in the store full of books on home construction and remodeling, find a couple that look good and read them. 

It is amazing how much you can learn from doing just that, often times you are going to pick up things contractors do not know. 

You don't have to know how to do the work, you need to know what is and is not good work. 

Flip homes are notorious for having bad workmanship, if you can learn what good work is and be sure the contractors you are working with are doing the jobs right, rigorously inspecting their work, then you will be in good shape.

Howdy everyone!

I am a 41 year old 100% service connected disabled US Navy veteran considered total and permanent.

Currently I am living on a sailboat that I own outright but am getting tired of trying to make ends meet on the 4k a month I get from the VA Pension I get every month.

What I have been considering is if I could get to the point where I own some rental properties I would be in a much better position financially and want to start with at a minimum a 4-plex. What got me started thinking along these lines is I was told that my boat does not qualify as a legal residence, and technically by the letter of the law I am homeless (albeit quite comfortable so please no pity here)

I am wondering what options are available to me in order to be able to make something like that happen? I have heard with an FHA first time home buyer I can finance a 4plex, and that there are some tricks to getting that done? Not sure if VA loans can qualify for what I want to do?

What I was looking at is using one of the units in the 4 plex as my primary residence, then renting out the other 3, then possibly getting a roommate for my unit as well as I would be spending most of my time on my boat. Or possibly even putting a large shed on the property and insulating it and wiring it up and using that as my unit.

I would be looking to do this in my home state of Montana. Preferably in either Butte, Billings or the Bozeman area or somewhere in between.

A couple of key points that are important to me is I will not put my boat up as collateral, and preferably would like to do this inside of a closed S corp or LLC to insulate from liability stemming from the property.

Any thoughts or advice you have to offer would be greatly appreciated as I am pretty lost at what to do here.

I should also mention I grew up working construction and have built several homes, I have just never been on the ownership side of things.

Thanks! 

Quote from @Douglas Gratz:

Quote from @Nick Richards:

Quote from @Douglas Gratz:

Quote from @Nick Richards:

Quote from @Douglas Gratz:

@Bruce Woodruff and yes its going to cost $180 per sqft not $300. I do not know where you got your numbers from.  This 1.7millino home I am buying will need top of the line finishes yes, but its the location that makes the price so high , not the house here. (the house obviously will need high end finishes, but you catch my meaning) Where do you get $300 from?

The lots is 40x60 of which 31x51 will be built on. I have to lots back to back .  And I am simply asking the above (not being defensive) all opinions welcome here. I like the truth

@Nick Richards 

 I agree with most of what you had to said and gas prices will effect my budget. I have a 15% contingency on a 1,140,000 budget we are actually at 196/sqft. And although I agree with how gas prices will effect me, 

I am new to the investing side of things, but I have been swinging a hammer, pouring concrete and pulling wire since I was 5 years old, I am now 40.

To think that you are going to build a high end large home 4 stories for $180 a square foot is dreaming, especially with costs as they are right now. The guys driving to your site are paying $5.00+ per gallon gasoline, same for the Diesel in the trucks delivering the materials, which means prices of lumber and steel are not coming down as much as they could from the insane levels they peaked to mid pandemic.

The other issue you have here, is you are trying to build tall, which means that there is a natural increase in cost simply for getting everything up to the upper floors because it is going to have to be hoisted up there with a telehandler or a crane.

Because of this you are going to be throwing a substantial amount of equipment rental costs on top of your build, and that equipment runs on $5.00+ a gallon diesel fuel.

Then you have to consider that labor costs are also going up because of inflation, When McDonalds is paying 13-15 an hour, skilled labor is starting to demand 25-50 an hour depending on the trade, and then the contractor is putting a markup on that before you are being billed for it.

Additionally with the structure being as tall as what you are constructing, the walls have to be built stronger than a standard two story construction would be, and that weight has to be transferred to a very solid foundation that costs more money to build.

The price of concrete is going up because it has to be trucked several times, and again, Diesel fuel is so expensive right now, and the same for the steel that has to be used to reinforce that concrete.

There is another issue with building tall as well, is that your guys are going to need to have scaffolding and man lifts to get to the exterior of the house to work on it, and going 4 stories up, that is a lot of scaffold to build, not to mention that the employees working up there have to have fall protection training and so on.

This is further compounded by the fact that working up high, it just takes longer so you are going to have way more hours involved because for anything they do, they are either having to perch themselves in the man basket of the lift, or working around the support structure of the scaffolding.

And before you even start building in the site prep there again, you are going to have to pay for big earth moving machines, that run on that $5+ a gallon diesel, and pay for a truck to move those machines to and from your job site, and if those machines are big enough you have to pay for the permits for them to go down the road.

When this kind of construction could be done for $180 a square foot, Bill Clinton was president.

In 2000 looking at building single or two story dwellings if you could get by for $100 a square foot you were doing well. The currency has almost halved in value since then.

I don't see any way you get that done at 180, 300-400 is far more likely.

To give you a good example, look at this listing:

https://www.zillow.com/homes/f...

They got the structure of this house up, then got destroyed on the costs trying to finish it out, and it has sat like this since 2001. it is only 2 stories with a daylight basement. Just finishing this place out with the structure there (assuming it was all good) I would estimate at 150-200 a square foot. (And mind you if this property was in the lower 48 not Alaska)

I would suggest if you want to learn the construction side of things, start with a much much smaller project, a 2br 2bath where you are putting less than 2-300k on the line.

Building bigger projects like you are wanting to tackle takes knowing the right people and having the right connections to get it done, and the only way to get those is to start with smaller projects to weed out the non hackers.

Construction is one of the most difficult endeavors there is to do efficiently because there are so many moving parts, which is why so many shy away from it, and why the people who are good at it can make the big money.

@Nick Richards

I agree with most of what you had to said and gas prices will effect my budget. I have a 15% contingency on a 1,140,000 budget we are actually at 196/sqft. And although I agree with how gas prices will effect me,  I do not think it will be a deal breaker. what everyone here fails to see is that with a budget of lets say 1.4million and I sell the home for 2.2 million and I do that twice thats gross 1.6mil profit and we should get 2.3 million and lets say I can only sell for 1.9 million (look at the comps) my soft costs are 60k+85k closing +140k interest =285k I would still net 214k per house....My point is, so long as I get it built I should profit . Now lets say **** hits the fan and we are in a real bad recession, I could sell these homes for what it cost to build and lose no money and learn alot....a 2 million dollar house listed for 1.4 million is a steal.....If things get even worse maybe I will lose 100k.....Risk/reward is definitely on my side 

I don't see how you get that build done for 196 a square foot. If it was a single story sure, but building a 4 story, not a chance.

I would expect closer to $400/sqft, which is gonna be about 2 million, which sounds about right for building a 4 story home in a major metro.

If your GC is telling you they can do it for 196, they are probably leading you along to get the work, and then are going to over run you with additional costs later.

 @Nick Richards You have no idea what your talking about no offense. My friend just built the same thing (10 feet skinnier in width) but still 4 stories. He did it for 175 sqft bc it wasn't a luxury home, cheaper finishes all around

 I literally grew up in the construction industry and have built more homes than you have fingers and toes, including luxury homes at places like the Yellowstone Club in Big sky Montana, But I have no idea what I am talking about? 

Well good luck to ya bud. 

Quote from @Douglas Gratz:

Quote from @Nick Richards:

Quote from @Douglas Gratz:

@Bruce Woodruff and yes its going to cost $180 per sqft not $300. I do not know where you got your numbers from.  This 1.7millino home I am buying will need top of the line finishes yes, but its the location that makes the price so high , not the house here. (the house obviously will need high end finishes, but you catch my meaning) Where do you get $300 from?

The lots is 40x60 of which 31x51 will be built on. I have to lots back to back .  And I am simply asking the above (not being defensive) all opinions welcome here. I like the truth

@Nick Richards 

 I agree with most of what you had to said and gas prices will effect my budget. I have a 15% contingency on a 1,140,000 budget we are actually at 196/sqft. And although I agree with how gas prices will effect me, 

I am new to the investing side of things, but I have been swinging a hammer, pouring concrete and pulling wire since I was 5 years old, I am now 40.

To think that you are going to build a high end large home 4 stories for $180 a square foot is dreaming, especially with costs as they are right now. The guys driving to your site are paying $5.00+ per gallon gasoline, same for the Diesel in the trucks delivering the materials, which means prices of lumber and steel are not coming down as much as they could from the insane levels they peaked to mid pandemic.

The other issue you have here, is you are trying to build tall, which means that there is a natural increase in cost simply for getting everything up to the upper floors because it is going to have to be hoisted up there with a telehandler or a crane.

Because of this you are going to be throwing a substantial amount of equipment rental costs on top of your build, and that equipment runs on $5.00+ a gallon diesel fuel.

Then you have to consider that labor costs are also going up because of inflation, When McDonalds is paying 13-15 an hour, skilled labor is starting to demand 25-50 an hour depending on the trade, and then the contractor is putting a markup on that before you are being billed for it.

Additionally with the structure being as tall as what you are constructing, the walls have to be built stronger than a standard two story construction would be, and that weight has to be transferred to a very solid foundation that costs more money to build.

The price of concrete is going up because it has to be trucked several times, and again, Diesel fuel is so expensive right now, and the same for the steel that has to be used to reinforce that concrete.

There is another issue with building tall as well, is that your guys are going to need to have scaffolding and man lifts to get to the exterior of the house to work on it, and going 4 stories up, that is a lot of scaffold to build, not to mention that the employees working up there have to have fall protection training and so on.

This is further compounded by the fact that working up high, it just takes longer so you are going to have way more hours involved because for anything they do, they are either having to perch themselves in the man basket of the lift, or working around the support structure of the scaffolding.

And before you even start building in the site prep there again, you are going to have to pay for big earth moving machines, that run on that $5+ a gallon diesel, and pay for a truck to move those machines to and from your job site, and if those machines are big enough you have to pay for the permits for them to go down the road.

When this kind of construction could be done for $180 a square foot, Bill Clinton was president.

In 2000 looking at building single or two story dwellings if you could get by for $100 a square foot you were doing well. The currency has almost halved in value since then.

I don't see any way you get that done at 180, 300-400 is far more likely.

To give you a good example, look at this listing:

https://www.zillow.com/homes/f...

They got the structure of this house up, then got destroyed on the costs trying to finish it out, and it has sat like this since 2001. it is only 2 stories with a daylight basement. Just finishing this place out with the structure there (assuming it was all good) I would estimate at 150-200 a square foot. (And mind you if this property was in the lower 48 not Alaska)

I would suggest if you want to learn the construction side of things, start with a much much smaller project, a 2br 2bath where you are putting less than 2-300k on the line.

Building bigger projects like you are wanting to tackle takes knowing the right people and having the right connections to get it done, and the only way to get those is to start with smaller projects to weed out the non hackers.

Construction is one of the most difficult endeavors there is to do efficiently because there are so many moving parts, which is why so many shy away from it, and why the people who are good at it can make the big money.

@Nick Richards

I agree with most of what you had to said and gas prices will effect my budget. I have a 15% contingency on a 1,140,000 budget we are actually at 196/sqft. And although I agree with how gas prices will effect me,  I do not think it will be a deal breaker. what everyone here fails to see is that with a budget of lets say 1.4million and I sell the home for 2.2 million and I do that twice thats gross 1.6mil profit and we should get 2.3 million and lets say I can only sell for 1.9 million (look at the comps) my soft costs are 60k+85k closing +140k interest =285k I would still net 214k per house....My point is, so long as I get it built I should profit . Now lets say **** hits the fan and we are in a real bad recession, I could sell these homes for what it cost to build and lose no money and learn alot....a 2 million dollar house listed for 1.4 million is a steal.....If things get even worse maybe I will lose 100k.....Risk/reward is definitely on my side 

I don't see how you get that build done for 196 a square foot. If it was a single story sure, but building a 4 story, not a chance.

I would expect closer to $400/sqft, which is gonna be about 2 million, which sounds about right for building a 4 story home in a major metro.

If your GC is telling you they can do it for 196, they are probably leading you along to get the work, and then are going to over run you with additional costs later.

Quote from @Bruce Woodruff:

Quote from @Nick Richards:

To think that you are going to build a high end large home 4 stories for $180 a square foot is dreaming, especially with costs as they are right now. 

@Nick Richards - you are absolutely right and we all agree. I got my GC license in '83 and have been doing construction since the '70s. But the OP seems to think he has figured things out and that the general rules do not apply to him. We have been warning him for months and yet he is set on his path. Now all we can do is wish him luck and hope he can recover from this fall. I hope he can prove us wrong, but reality is reality......

I'm trying to nicely say that you are wasting your time here :-)

 I can't say that I disagree with you, however, hopefully someone else reading gets some value out of it. 😎

Quote from @Douglas Gratz:

@Bruce Woodruff and yes its going to cost $180 per sqft not $300. I do not know where you got your numbers from.  This 1.7millino home I am buying will need top of the line finishes yes, but its the location that makes the price so high , not the house here. (the house obviously will need high end finishes, but you catch my meaning) Where do you get $300 from?

The lots is 40x60 of which 31x51 will be built on. I have to lots back to back .  And I am simply asking the above (not being defensive) all opinions welcome here. I like the truth

I am new to the investing side of things, but I have been swinging a hammer, pouring concrete and pulling wire since I was 5 years old, I am now 40.

To think that you are going to build a high end large home 4 stories for $180 a square foot is dreaming, especially with costs as they are right now. The guys driving to your site are paying $5.00+ per gallon gasoline, same for the Diesel in the trucks delivering the materials, which means prices of lumber and steel are not coming down as much as they could from the insane levels they peaked to mid pandemic.

The other issue you have here, is you are trying to build tall, which means that there is a natural increase in cost simply for getting everything up to the upper floors because it is going to have to be hoisted up there with a telehandler or a crane.

Because of this you are going to be throwing a substantial amount of equipment rental costs on top of your build, and that equipment runs on $5.00+ a gallon diesel fuel.

Then you have to consider that labor costs are also going up because of inflation, When McDonalds is paying 13-15 an hour, skilled labor is starting to demand 25-50 an hour depending on the trade, and then the contractor is putting a markup on that before you are being billed for it.

Additionally with the structure being as tall as what you are constructing, the walls have to be built stronger than a standard two story construction would be, and that weight has to be transferred to a very solid foundation that costs more money to build.

The price of concrete is going up because it has to be trucked several times, and again, Diesel fuel is so expensive right now, and the same for the steel that has to be used to reinforce that concrete.

There is another issue with building tall as well, is that your guys are going to need to have scaffolding and man lifts to get to the exterior of the house to work on it, and going 4 stories up, that is a lot of scaffold to build, not to mention that the employees working up there have to have fall protection training and so on.

This is further compounded by the fact that working up high, it just takes longer so you are going to have way more hours involved because for anything they do, they are either having to perch themselves in the man basket of the lift, or working around the support structure of the scaffolding.

And before you even start building in the site prep there again, you are going to have to pay for big earth moving machines, that run on that $5+ a gallon diesel, and pay for a truck to move those machines to and from your job site, and if those machines are big enough you have to pay for the permits for them to go down the road.

When this kind of construction could be done for $180 a square foot, Bill Clinton was president.

In 2000 looking at building single or two story dwellings if you could get by for $100 a square foot you were doing well. The currency has almost halved in value since then.

I don't see any way you get that done at 180, 300-400 is far more likely.

To give you a good example, look at this listing:

https://www.zillow.com/homes/f...

They got the structure of this house up, then got destroyed on the costs trying to finish it out, and it has sat like this since 2001. it is only 2 stories with a daylight basement. Just finishing this place out with the structure there (assuming it was all good) I would estimate at 150-200 a square foot. (And mind you if this property was in the lower 48 not Alaska)

I would suggest if you want to learn the construction side of things, start with a much much smaller project, a 2br 2bath where you are putting less than 2-300k on the line.

Building bigger projects like you are wanting to tackle takes knowing the right people and having the right connections to get it done, and the only way to get those is to start with smaller projects to weed out the non hackers.

Construction is one of the most difficult endeavors there is to do efficiently because there are so many moving parts, which is why so many shy away from it, and why the people who are good at it can make the big money.

Quote from @Atul Mohlajee:

An existing tenant is asking for permission to include German Shephard dog while renewing lease.  Willing to pay $600 dog fee annually.  It is unit 1first floor of a 2-Flat in Forest Park.  The property has a small front yard.  There is parking pads in the rear of the house. New lease is proposed at $1625/ month plus $50 /month dog fee for a 2-Bedroom unit in a 2-Flat.  They are good tenants otherwise.  Please give your thoughts if you would allow or not.

I am extremely familiar with German Shepherds, I have hat 6 of them in my lifetime, they are really fantastic dogs, assuming they have had the proper time and attention put into them.

This is my most recent German Shepherd who lived to be 13 1/2 years old. He was extremely well behaved and I trusted him more than I would trust most people. Dexter was extremely sociable, so well trained I could walk him off leash, and you could leave him sitting in the truck with a grocery bag full of steak for half an hour, and come back and nothing would be touched.

However, this was because I put the time into him.

German Shepherds are large dogs, they are intelligent dogs, and so if they are not properly trained and socialized, you have a large, fast highly intelligent problem on your hands.

When it comes to this what I would say is that if it is an adult dog that is already ready to come home. Meet the dog, spend some time with it, you will know within 15 minutes how the dog is going to be, if it is friendly, well behaved, that is what you can expect, if it is rowdy and ill behaved, that is also what it will be.

Now mind you that for the first few minutes you meet the dog it is going to be excited, so do give it a bit to calm down.

If the Dog is a puppy, I would want to hear what their training program is, how they intend to keep it from chewing on the property and so on, and how they plan to handle ensuring that the puppy is not going to the bathroom inside and so on.

Specifically I would want to hear that the dog is going to be going to a training program from a well established dog trainer, and that they have real clear goals for what the dog is going to be trained to do and by when.

The other thing to consider is the age of the dog, a German Shepherd who is 4+ years old is going to be a lot calmer than a dog aged 1-3, those are essentially the Teenage years for the dog, and when most problems with a dog are going to occur, I would not disqualify or accept a dog solely on the age, however just keep this in mind.

You might find as well having the German Shepherd around mitigates or prevents a tragedy.

Buddy the German Shepherd is a great example.

The thing that makes a Shepherd so special is they are a dog you can literally take to war and fight with, then come home and set your newborn baby on the floor next to and know they will be safe.

It all boils down to the time someone puts into the dog training and socializing it.

I do a lot of 3D printing in plastic, and when talking about using it for home construction, I have doubts if it will ever go mainstream for the fact that when dealing with 3D printed concrete, you are talking about an incredibly rough surface finish, that then must be finished.

Once the concrete cures, if you leave it as printed, over time it will endlessly shed dust, so the space will always be dirty.

If 3D printing is to become viable for home construction, a far superior finishing method is going to have to be found.

3D printing architectural steel structures is something that I consider will become common place.