All Forum Posts by: Ben McMahon

@Lauren L Pokladnik

Hey Lauren, we actually run into this type situation pretty often in San Diego, and seen people do it different ways.  I wouldn't dare advise on a tax strategy, but as far as the building itself goes, it will probably depend on what your goals are.  Big construction projects take a lot of time and money, but can also be super lucrative if done right.    Happy to chat.  Just send me a DM

@Jose Solorzano

Let me know how that goes.  I am a General Contractor, and we do a lot of ADUs.  I am in the middle of my own land development deal and will be looking for a good lender very soon.  

Michael,

You have really come to the right place for this.  Bigger Pockets has the answer to every question you could ever dream up.  I have been investing in real estate since 2009 and I still use it to fill in the gaps of my understanding.  There are a lot of ways to do it, and it's worth spending a little time on learning especially since it's a huge investment. 

I have 2 thoughts for you since you are starting from scratch.

1) find someone you trust that is currently doing what you want to do and flush it out with them.  

2)You should know pretty quick whether real estate is your flavor or it isn't.  IF not, don't waste any time and find another road to riches.  If it is your flavor, don't waste any time and get after it!!!  It's a fun ride.  

@Alex Sinunu

As someone who has used private money a number of times, I feel qualified to speak to that.  100k in CA doesnt get you very far as I am sure you know.  If I am looking for private money that I am looking to get something fully funded.  That being said, you still got options.  

Hard money lenders typically are going to covering 75%-85% of say a fix and flip.  There are a lot of situations where the remaining balance needs to be covered.  So finding someone who needs a bridge loan is a good option.  You can typically get a higher rate on that money.  The risk is also higher as you would be essentially taking second position.  But I would imagine you could probably be somewhere in the 15%-20% range.  Which is pretty killer.  Someone else might be able to say exactly what the going rate is at this moment.

I didn't read the other replies to this, but im sure people have mentioned looking in different markets as well as teaming up with other investors.  DM if you want to chat more.  Hope that helps.

Hey @Lindsay Bowman

I am a GC in San Diego and am building a lot of ADUs right now.  Go ahead and Private message me and we can link up.  We are pretty dialed in on this.

@Mark Williams

Thanks Mark, that's helpful and kinda what I was thinking.  I know what hard money terms look like, but typically that will require me to put in anywhere from 20-30%.  Which on 3mil plus projected rehab is going to be pretty heavy.  Not to toot my own horn, but I am pretty good at convincing people to give me money, and I feel highly confident in getting it 100% financed.  So I guess I need to determine what is an attractive offering in todays environment.  

Secondarily, how I cut in the designer.  I think she was originally talking about 15%profit plus a designer fee.  Which in my opinion seems fair, maybe even a little low given what percentage I will get.  Of course, I have the experience, and am doing most of the work.  She found the deal.  

Forgot to mention, I am a general contractor.  So my team will be doing all the work.

Ive done a lot of flips and JVs, but I wanted to get some feedback on others experience of structure in todays environment.  

I've got a designer who I have been doing work with, and she wants to do some high end house flipping.  In the past Ive done strait 50/50 partnerships with private investors, and also Preferred returns.  I am trying to figure out the best way to ad a 3rd party into the deal.

The designer and I are planning on putting together something for our potential capital partner.   What are terms that should make everyone happy?  

@Brent Wood

Yeah, I ran into this years ago after hurricane Florence.  My only thought is to seek out properties with minimal damage that can quickly settle the claim.  A good number of people want to be done with vacation homes in these areas after an event like this, and you might find them amicable to a deal.  

I spent time in the Carolinas after that hurricane doing restoration work.  The more affluent owners settled claims quickly and secured contractors to do the work even if they ended up coming out of pocket.  A lot of times it was an excuse to upgrade.  It gets harder the further away you get from the event.

At the beginning the insurance companies are eager to look good and stroke checks, but the longer time goes on, the less willing they are to please the owner.  Thats my experience anyway.  

Connect yourself to some of the adjusters in the area, and they can be really helpful since they will have first hand knowledge and experience with which insurers are being cooperative and which ones to steer clear of. They probably will also know which owners would be interested in making a deal.  

Im not the most experienced in this field, but there's a lot going on.  I'd say your best bet though is talking with the adjusters.  They will be all hanging out with the other trades getting a beer at midnight and their first meal of the day.  If there is any restaurant still upright.  DM if you want to talk more.

This is actually pretty interesting.  I wonder if there is a way to get in on the inside track for opportunities.  @Matt Devincenzo I'd be interested in what channel those projects come to you.  Is it the same person every time?  I have a friend that is working on the board for Catholic Charities here in San Diego, and he has asked me some construction related stuff on church property.  I just don't know who makes the decisions, or where to look.