All Forum Posts by: Chris Harpe

Hey BP! Does anyone know of a good audit CPA in North Carolina? I'm hoping to find a CPA that can perform an audit on a newly created LLC to qualify for a GC license upgrade. Again, it's a brand new entity with less than 40 transactions to date total.. I would assume it would be one of the more simple audits possible. Wondering if there's a CPA out there who could get to it in the next 2-3 weeks. Thanks much!

Look up "Construction Draw" and it may give you a better definition than I can provide. 

Basically when you build new construction or remodel a house/building, the lender (whether it's hard money or traditional bank financing, etc) typically won't give you all the funds to for the construction work up front. They typically release the funds to you in stages as you perform work on the job. These disbursements of loan funds are called construction draws. For example, if you borrow $300,000 from a bank to build a house, they won't give you $300k when you start. They will give you a small percentage of that once you finish the foundation. Then they will give you more once it's framed, and so on. They basically only release funds for work that's been completed. Some lenders take longer to release these funds than others, and some don't release enough funds to cover the costs you've incurred until the project is very close to completion. Each lender has their own policy as to how they release these funds and when, and it's vital for you to know this. If you're not careful, you may end up in a situation where your contractor is asking to be paid for the work they did, but the bank won't pay the full amount in their draw, so you have to come up with the money yourself or have the contractor wait to be paid. Remember construction doesn't happen overnight and you've got to keep your contractors paid once they finish their work.

Link to a video of a home being built in 1928

Homebuilding in 1928

Thanks for the input Bruce. As a homebuilder myself, I see where you're coming from. Just wondering if anyone knows of any companies that are innovating in this space. Who do you know that's thinking differently in the building space?

Crazy to me we've been building houses basically the same way for over 100 years! There's got to be a different way to think about this

Ask your hard money lender about their draw schedule, origination fees, etc. Draw schedule can be an important one. Paying contractors quickly is vital to keep their loyalty, so it's important to receive draws from your lender in a reasonable timeframe (draws are progress payments from your lender). In my market, market hard money rates are around 11% interest and 2% origination fee. Best of luck

Does anyone know of any companies in the United States that are taking an innovative approach to homebuilding or construction in general?

The traditional site build method (building and assembling everything on site) seems ripe for innovation to reduce costs, especially in the current construction climate (construction is crazy expensive at present). 

I've heard of BOXABL (https://www.boxabl.com/), which is pretty interesting. Anyone know of any companies that are doing innovative stuff like this?

3D printing?

Cheers,

Chris

Hello BP!

Might anyone have some knowledge to share about how many times you can seller finance vacant land in one year? I know Dodd-Frank limits the financing of residential mortgages, but I don't think this applies to vacant land. Does anyone know of any states that have their own regulations on this particular topic? Or are owners able to offer owner financing for unlimited parcels of vacant land each year in every state?

Thanks much!

Chris

Howdy BP!  I'm looking to build a house hack this year and I'm wondering how quickly after I build and rent the property will lenders typically allow me to count the rental income from this property towards my Debt to Income ratio?

Example: John builds a 4BD / 2BA single family rental house and completes it in August, 2021. Once complete, John rents out three rooms and lives in one. The house cash flows $200/mo after all expenses (prop. mgmt, taxes, insurance, cap-ex, maintenance, etc). To build the house, John got a construction loan. He put $20,000 down, and the bank pitched in $250,000 to finance the land purchase and the cost of building the house. The loan converts to a fixed 30-year automatically with 3.4% interest when construction is complete. The monthly mortgage payment from this loan is about 50% of John's monthly ordinary income from his W2 job, which essentially maxes out his DTI ratio, unless the rental income from the house is factored in which would offset the mortgage payment.

The house is finished in Aug 2021 and the house appraises for $370,000. The next month (September 2021), John then tries to get a Home Equity Line of Credit to access the $100,000 of equity in his new house.

Key question:  do you think a lender will lend a home equity line of credit against the house's equity before the rental income from the house is reported on John's 2021 tax return which will be filed in 2022? Will the lender consider all or part of the rental income from the newly built and rented house? 

Assumes long term rentals (1 year or more), no other debt outside mortgage on newly built house.

Greetings BP! My partner and I are looking for a CRM software that will provide the following functionality. Wondering if anyone is currently using something that accomplishes anything remotely close to this:

• Create and/or send comprehensive, automated drip campaigns using a variety of media including email, direct mail, ringless voicemail, and text messages.
• Collect and track information on leads obtained from drip campaigns and conversations in individual lead file.
• Route inbound calls and record calls in the lead’s file.
• Automatically populate lead database with information from website contact form / squeeze page and initiate drip campaign.
• Dotloop or DocuSign integrations are a plus

We're aware of REI Blackbook, but we're wondering if there are more cost effective options that fit our needs. Any ideas? If Podio, are you using any extensions or integrations? What specifically?

Thank you @Hai Loc and @Thomas S. Really appreciate your time and wisdom