All Forum Posts by: Ben McMahon

You should be able to get it priced out pretty easily in your area.  I had a duplex once with separate electrical, but shared water and sewer.  It wasn't overly complicated to ask the town for the average cost and just split it in two.  I would def make sure you pass the cost on to the tenants though.  

Thats a very lawyerly question to ask Laura! 

Hey Sharon, 

     Very exciting that you want to get things going.  I have a few thoughts.   

1) Make sure you really know what your goals are getting in.  If your goal is to acquire rental properties and hold them for 30 years and retire on the cashflow than I wouldn't worry too much about any crash.  If your goal is to buy and flip it in 3 years than you will have a far different strategy.  

2)  Real estate is the same in Kansas City as it is in the Bay Area.  A 3 bed 2bath still has 4 walls and a roof.  The only real difference is the perception of value.  Its actually more similar to stocks than people think.  Its the perception of value that dictates the stock value of a house in the bay area vs a house in the suburbs of Kansas City.  Housing Stock prices are going to go up and down depending on the markets. 

 So look to minimize your downsides and maximize your upside.  Figure out what your risk tolerance is.  If you are a high risk, high reward investor, than flipping houses in the bay area might be right for you.  I would even go so far as to label difference areas of the country on a risk reward scale after you soul search your risk tolerance level.

3)  Out of state investing - Theres no reason to think that out of state investing can't work.  What you will need are systems and procedures to insure that you are not getting yourself into trouble.  Personally I have never bought a property without looking at it with my own eyes.  I dont know that its necessary to do that if you are buying a ton of property, but if you are only buying one, than thats going to be your baby and you want to know everything about it so you can learn as much as possible.  

You are also going to need that team, and a face to face with some property managers and contractors is going to be the best way to do that.  Again, its not a necessity, but it will minimize your risk of getting screwed.  

Side note- I was in Kansas City a few months ago, and I was shocked at the amount of derelict property.  Be careful where you buy.  Getting a lemon on the first one is a drag

Send me a message. I might be able to help

Sorry, I am just getting back to you on this.  Somehow got missed.  @Ricky Sabogal

What I mean is there is a lot of gray area in some of these rehabs, and unless something is specifically mentioned in the contract, it becomes a matter of "whats industry standard".   Your expectation might be different than the contractor.

Generally both parties have insurance and all that, but there is shared liability in the project.  If you decide not to pay him, thats a liability.  If his carpenter slips off a ladder thats a liability, etc.  

Drive fast and take chances. Just kidding. It’s a long term game. Play it that way

Hey Rhett, I can probably go take a look at it. I’ve been getting out of the game, but I have a little time right now.

Contractors will often charge overhead and profit of 10-15%. There is also a general conditions fee often of 5 % sometimes. All this is to insulate the price if things go south. Which they often do. A lot of contractors will make money on labor and materials as well. If they missed something in the bid, you can kiss that 15% goodbye. Things rarely work out perfectly, and they are taking some of the liability off your shoulders. So they should get that.

Hey y’all. I’ve been very active in Front royal for the last 10 years. I just sold my property management company, and have a the contacts needed. Agents, pm, contractors etc. go ahead and pm me if you want info

Cory Melick hey man, welcome to the area. I’m not RE investing for the next two years since I sold my business and signed a non compete, but I can probably help if you need anything. I know lots of contractors, agents, knuckleheads and so on.