All Forum Posts by: Chris Calabrese

From your description, it sounds like you weren't intending to file mortgages, but for the loans to be unsecured. Otherwise, you would never have the money just "sitting in the bank". In that case, I don't see why they can't just loan the money to the business, and the business gives them a note for the money owed and pays monthly interest. This is how we fund all of our deals. Any separate entity seems like huge overkill.

I don't think it matters either, but our classification is 531390 - Other Activities Related to Real Estate.

Here are a couple of our flips painted. Our good spray guy does these in about 2 hours, 1 for primer coat and 1 for finish, on consecutive days. Inside, outside, shelves, drawers, doors, everything. We take the doors down and the hardware off to get a better job. Use a tip with the finest possible spray pattern. Try Sherwin Williams Pro Classic, it's a latex enamel but is self leveling and dries very hard like oil paing.

One hour to rehang doors and add hardware. With the newer cabinets, you should have almost no prep work.

http://www.irongatecharleston.com/wp-content/uploads/2012/03/IMG_0515.jpg

http://www.irongatecharleston.com/wp-content/uploads/2012/04/listing071.jpg

In 90% of the houses we buy we paint the cabinets white, inside and out. Oil prime, then spray with a good quality oil paint for a harder finish. Looks clean and new, and is very easy. Add a nice crown molding for an added touch.

I think if you're good and experienced, this could be a great niche. My #1 concern is flexibility. You will be working in homes in various states of disrepair and will probably be one of the first people in there during the rehab, so you may not be able to do everything exactly 100% the way you want to, but you have to find a way to make it work. Try to repair instead of replace whenever possible.

Investors are all about the bottom line - do quality work, give reasonable rates and pay for referrals and you could become the go-to guy in your area.

Congrats J Scott. You are the real deal when it comes to flipping and have the best and most well thought-out business model I've seen for rehabbing.

I'm amazed how much time you contribute to BP considering the number of projects you take on. Thanks!

I'm all for starting an LLC to hold your properties. I know here in SC you can file the paperwork for only $110, so the cost isn't really prohibitive. However, keep in mind that if you are going to be using bank financing, you may not be able to fund your first deal in the LLC's name anyway, so I would agree with Luis that financing and finding your first deal are your main priorities.

What are the reasons for the deals falling apart? Is it something about financing a flip house, or are you dealing with unqualified buyers. It sounds like it may not be something specific about rehabs that is giving you problems. You may want to get licensed and list your own houses if you aren't already doing so or find a better listing agent that can get a deal closed.

Buyers will tend to stick around once they have something invested, i.e. paying out of pocket for an inspection or appraisal. If you are selling to mostly first time homebuyers, you will have some people who get cold feet, but you also need to be wary of certain realtors who continually bring unqualified or unmotivated buyers.

I know we have more problems with the lenders scrutinizing our deals because they're flips. We haven't had one completely fall through, but our last 3 were delayed over 2 weeks due to technicalities with the appraisals (in one case, the appraiser forgot to check a box that the house was corporate owned). In those cases, it's important to keep the buyer engaged or they may lose patience.

It's a tough lending environment, but you may also have just hit a bad stretch of luck over a small sample size.

Yest, but your mortgage specifically states the consequences of not paying back your debt - you lose your collateral, ruin your credit rating, and possibly face a deficiency judgement for the balance. There should be nothing illegal about walking away from a mortgage.

However, collecting rent while not paying is a different story. And obviously, lying on a mortgage application is fraud and should be treated as such.

The real problem with the system is that the foreclosure process takes too long and allows people to take advantage of it. Living for 12 months or more without paying your mortgage is a joke. Once you hit 90 days past due, you should on the street. The same is true with "professional tenants" who abuse the system in states that favor them over the landlord.

J is correct. E&O insurance protects you from claims made by a client, in other words being sued for negligence, misrepresentation, etc.. It doesn't apply if you're representing yourself since you can't sue yourself. It's one of the minor disadvantages to self-representation - you can't throw the blame on anyone else.