All Forum Posts by: Patrick T.

@Tom Meade What a tremendous thread. Thank you.

Hey there @Brian Mathews

It's not "potential other jobs", with all respect to you. It's a loss of income because I would have to cancel/postpone other guaranteed contracts.

When we buy for cash, holding costs are minimal. That's why these properties are prime candidates.

And when we buy at 70% of ARV less improvement costs based on good comps in the area and a solid quote for improvements, we aren't risking much. Granted you have to be absolutely confident in those two elements.

But it is clear from all of this that there must be credibility on the part of the facilitator to represent the real estate and contracting pieces accurately.

Thanks for your thoughts @Paul Jamgotch .

The way I have to look at it is that I bring 3 pieces to the table:

• The ability to put an investment partnership together and make them money
• The ability to handle the real estate transaction on the buy and sell, saving 6% of net at a minimum
• A contractor with skin in the game, who also owns a cabinet shop and handles many of the sub jobs personally.

These investors see what a tremendous opportunity they have to multiply their return compared to their current vehicle. They would not find my combination of abilities anywhere in this area, period. And that's what makes it possible for them. That's the 50/50.

On a property with ARV of 120K, the real estate piece is worth about 6K+. The ability to provide cabinetry (I own my own shop) well below retail, and eliminate the direct and indirect costs of subs (I handle the sub work) is worth 4K+. And by skin I mean that I would be working for 1/3 what I could get just contracting jobs in that amount of time. I would be taking a loss if the project went south.

My loss, if he has 1st position is complete. By the formula (70% of ARV less costs) he could recoup.

Once again, I appreciate your perspective.

@Account Closed HI.

As a Realtor I helped clients buy in a few of them. If it's a community owned by one entity, you might get blocked. Some of them have to approve, or even insist on brokering every deal. If it's more loosely organized it could be a good idea. It doesn't matter what happens in the economy - we all get old.

One thing - do your research on the trends. There was a definite trend away from ownership (what they call Buy-In) in those communities to rental agreements. It may be different in your area.

Hey BP Nation! I posted this in legal and got no response, so I'm re-posting here.

I'm a General Contractor who has worked with several investors where they buy the property first and hire me to rehab. I quote the job, take deposits, get paid on a schedule like any other large job.

I also spent a number of years as a licensed Realtor, and I'm ready and able to locate properties that are prime for rehabbing.

A couple of these investors have an interest in partnering with me wherein I would locate the property, negotiate the purchase, do the rehab, and get it sold. They are just cash partners. I'm willing to do that if they will give me a minimal draw to pay my bills during the rehab phase, and give me a materials deposit. (naturally I will pass my supplier discounts through). But I can't afford to put in sweat equity AND finance the materials as well.

I know this concept might surprise many who think the contractor should play bank too, but it isn't going to work that way here.

What are your thoughts? Sound fair? What type of equity split in the end? What would the partnership agreement look like? Thanks in advance!!

Hey BP Nation!

I'm a General Contractor who has worked with several investors where they buy the property first and hire me to rehab. I quote the job, take deposits, get paid on a schedule like any other large job.

I also spent a number of years as a licensed Realtor, and I'm ready and able to locate properties that are prime for rehabbing.

A couple of these investors have an interest in partnering with me wherein I would locate the property, negotiate the purchase, do the rehab, and get it sold. They are just cash partners. I'm willing to do that if they will give me a minimal draw to pay my bills during the rehab phase, and give me a materials deposit. (naturally I will pass my supplier discounts through). But I can't afford to put in sweat equity AND finance the materials as well.

I know this concept might surprise many who think the contractor should play bank too, but it isn't going to work that way here.

What are your thoughts? Sound fair? What type of equity split in the end? What would the partnership agreement look like? Thanks in advance!!

Hey Guys,

Being a GC myself I see a little different angle. If your contractor/partner is committing a month of his time with no income from this job, doing work personally as well as overseeing trades - that's a significant contribution. Read some of the posts on this site from other people who only wish they could find a GC they could trust as a partner.

To me that is the perfect situation for you both, assuming all of the other pieces are covered.

@Steve L. is right that the 25K seems like a lot for no kitchen and no GC hourly or profit. It would be interesting know what the project involves and to see all of your numbers (especially the details of the rehab).

As others have said, unless you just don't need a profit take the opportunity to learn design and staging. Part of your learning will include how to be a real tight a...:-)

Welcome Lisa. A good skill set..looking forward to your input.

@Gerald K. Mine too!

@Duncan Taylor Very good information, thank you!

@Gerald K. Thanks, that podcast was exactly what I was looking for.