All Forum Posts by: Kien Hua

@Andrew Cordle May I ask how you controlled your renovation budget using Interior Designers? Also, how iterative was the communications with them?

To answer your question about how much we planned to pay our Interior Designer, we offered more, rather than less because:

1) We thought we were building a long-term relationship.

2) Her clientele is mainly high-net worth individuals and celebrities. She charges her clients $300/hr and her projects usually have no budget due to the nature of her clientele. 

Our estimated compensation to her was $16,500. Keep in mind that each deal is different and we determine how much to "give" based on stakeholders involved, how much "meat is on the deal," and perceived upside in a design driven property (vs market cookie-cutter design). She was complaining that it was not enough money and bailed on us.

@Stan Bulter  and @Curt Davis - thanks for your comments. Anyone else with another perspective?

Hi Karen, thanks for the questions.

(1) What is your role in the deal? 

My team are the principals in the deal. We put down all the cash and hold title on the deal. We are also the Developers, who hire and are the point of contact with the General Contractor and all other stakeholders, including the Interior Designer. 

(2) I don't know what you mean when you say "does anyone work with interior designers on their flips? " 

To clarify, does anyone hire Interior Designers to work on their flips? How did you arrange it financially? We used a % of exit price as compensation to the Interior Designer, so they would be working for sweat equity. How did it turn out for you logistically? Our Interior Designer bailed on us when we provided our candid thoughts about how the design puts us over budget and we wanted to talk through the design. She was offended that we may compromise her artistic integrity with our financially driven comments. She also felt that she did not have the time for an iterative dialogue on design. She wanted it to be a "linear" discussion. We interpreted it as "her way or the highway" and wanted to clarify that as principal investors, we don't feel comfortable with that approach. We wanted a balanced approach.

(3) On the interior designers flips? 

No, the Interior Designers would not control the deal or have any capital in the deal. Although, our team prefers this arrangement with the right Interior Designer, so that they would have skin in the game and be committed to the deal from beginning to end. 

(4) On flips where you use an interior designer? 

Yes

(5) Are you saying you were doing the rehab, and she was providing interior design services? 

Yes

My team has been lucky enough to obtain accepted offers on all our investment properties within 1 month of listing them. However, it appears the market is getting tougher here in Southern CA and we want to be proactive in managing the environment. We have not staged our homes yet, but is seriously considering to do so.

Can you guys provide your input on logistics, recommended stagers, etc?

We are looking for better insurance policies for property and liability on our flips in Southern California (adding our general contractor as additionally insured as well). Does anyone have recommendations on insurance companies and policies?

We're removing a few walls on a project of ours. Two non-bearing and one bearing. Is it recommended to add shear walls for lateral purpose? See floorplan below. The bearing wall we are removing is the wall between the Study Room and the Dining Room (Bedrooms not affected).

Does anyone work with interior designers on their flips? My team started a joint venture partnership with a well-known one, but she bailed on us due to it being more work for her than she anticipated compared to the sacrifice she is making in charging lower fees.

If so how did you structure your deal and how was your experience?

CaliforniaLA