All Forum Posts by: Brandon Raeburn

 In NYC, you need $25k in your bank account, $5 million insurance policy, and atleast a $2 mil bond to work on a home (if its worth $2mil or less, commercial requires the cost of the property)  to recieve a GC license. I generally use the bid bonds for gov't contracts however many home owners throughout the city and Long Island will ask for bond paperwork. Also we generally wont start work unless we have 50% (up to $10k) and 30% ($11K and over) of the contract. If its a  $5k or less job you'll need to pay in full before I take a tool off my truck. 

 Wow Jay, you guys are pretty lucky over there in Oregon. Even the little guys need to get the bonds to (legally) do work over here. Though we only need 20%.

Hey Drew great question and it'll depend on what kind of buy and hold investor you ask. Some buy their property in full and want to see hig cash on cash returns (calculated by dividing the cash flow (the net operating income) (before tax) by the amount of cash initially invested). 

Others (such as myself) buy property with the highest amount of leverage possible and would care more about cash flow. For us, we want all the expenses paid for plus positive cash flow. So you'll need calculations for NOI, and cap %. I look for atleast 8% cap (in NYC) and 12%+ (out of state) with $20k+ (NOI).

The difference between our mindsets would be our level of risk tolerance. First, find out the tolerance of each of your buying partners and the'll tell you exactly what they want. Their are scripts online if you need help. 

Hey Mark, congrats on the new build. First, the true cost issue can (should) be solved by having multiple quotes by other builders and general contractors. Second, you can use a website called Homewyse dot com to see what true cost are in your local market (ie; materials, labor, etc). Also a book produced by the DEWALT tool company called Construction Estimating will give you the basic to feel confident at the pricing table.

 After picking the best price quote  for the project you'll have a number of different ways to structure the draw schedule.  Set completion marks that need to be met in order to receive further draws (ie: completion of foundation draw 1, framing draw 2, ruff plumbing draw 3 etc). Or find estimated time scale for finish project and divide into even monthly payments. A draw schedule of five to seven payments is common for a new house.

Lastly, you can require the builder to have both a bid bond and performance bond before being awarded the contract. The bonds will require the builders insurance company guarantee repayment of  project funds if he fails to meet contract terms (ie: complete the project).

Hope this helps, and I wish you and your wife the best of luck.

Hey Chris, I work with an equity fund manager who provides funding. PM me and I can help get your deal funded as long as you have skin in the game. I am willing to sign a NDNC for the OM, pics, underwriting and any additional info on the deal. 

Hey Chris, first check local ordinance and violations with D.O.B. Second, ask previous tenants about plumbing history of the property.  

Staggered, you don't want a month where all your units are vacant, that means no income with operating expenses. Its easier to find 1-2 tenants then 10 all at once.

Hey Mohammed, you'll need a private lender or hard money loan. PM me I can help with both.  

Oh gotcha. The banks/CO will send out their own appraisers and low-ball you for the DP. Try selling the land and 1031 into the other property. 

Hi Hogan, very interesting deal you have there. Luckily you have some options however I want to address the insurance angle. Insurance may be cheap now but if a future sewer line crisis cost the insurance agency to much money in payoffs they may drop you from your policy. This will cost you in the future when you look for a new insurance provider. Try negotiating the offer price to reflect the repair cost of the sewer line. The known defects of the sewer line should give you some leverage at the negotiating table. If the seller says no to fixing, and no to price reduction then you buy as is or walk away.