All Forum Posts by: Chris Field

Not until you find a deal. For a single rental LLC's don't really do anything you can't do with insurance.

Don't get me wrong you should have an LLC but far from what you should be focusing on.

I have been around the RE block a bit and I am starting to see the same thing. Money is cheap and a lot of people are advocating a lot of leverage. 

Its the same argument that was heard in 2005-2007. 

Leverage is a powerful tool, but its always best to use it with caution. I personally believe  the commercial space might be in for a bit of a shock in 5-7 years when all those low rate adjustable loans reset; especially some of the weaker buys leveraged to 80% or more. I have even heard of 90%!

I just finished a 9 unit townhouse site and my next project is a 15. The larger sites are no different than the smaller ones just larger numbers. Banks typically want to see a track record before you go to bat on the larger stuff, which is a pretty big hurdle to jump for anyone new.

My bread and butter are spec houses in the $350k range. Than I stepped up to a $1.7m site, the next one is $2.8m, and after that who knows but I'm certainly not done.

If you go very large 50-200 units than you would start to do phased construction, but for the smaller ones like mine I just do it all at once.

The larger sites can become quite complex in terms of regulatory approvals, and political in some cases. Also quite frankly the highest barrier to entry is the cost. You actually do need deep pockets to do the larger sites.

You also need a lot of knowledge about the construction process which goes back to the bank's wanting experience. You can make a mistake on a simple spec house and it costs you $10k or $20k. Not the end of the world you learn. BUT you make a mistake on a 15 unit site and it can easily cost you $100k or more. So you need a lot of experience in the field because mistakes can literally make or break you.

YMMV

I have always built, I dislike remodeling its a lot of work and quite frankly a PITA.

In my area its the same inventory wise, the amateur flippers are back and bidding stuff up to the point where their is no margin left on it. I can compete on some stuff simply because I'm more sophisticated and can see and do things with a piece they cannot. But that's not typical. 

Frankly it drives me nuts, these guys are annoying and only poke their heads out when the market is good.

I can't see a bubble forming like in 2008 simply because the easy mortgage money is no longer their to fuel it. 

In my little economy prices have been more or less flat since 2008.

Prices on SFH's have to go out of whack compared to incomes to have a correction, at least in my area they are about right. Throw in tight lending standards and you have just the opposite of a correction, solidly financed properties at sustainable prices.

YMMV. 

You have to buy it for the lower price than refi it. 

Most banks go 80% so you should be able to pull most of your original money back out. 

I don't see the problem, he told you he would close the property lets see if he does.

At the end of the day you signed a contract, go by what it says. If you don't like a contract don't sign.

I doubt it were talking about a quarter point rate increase. Most of the effect will be sociological. 

I pay $3k-$8k in my area. 

20-25 ft wide is common for me; my narrowest SFH was 17.6.