All Forum Posts by: Christopher Blanco

I would put Shaker Heights in its own category. Cleveland Heights, while strict only requires escrow on severe items. Shaker Heights requires 150% escrow on EVERYTHING they find (down to loose door knobs). 

I would talk to your real estate attorney about setting up a syndication.

@Lincoln Coverdale, @Brian Pulaski, @J Scott

I went back  to contractor and negotiated nearly $9600 off of his budget. I had data to back me up. He agreed to cut the bathrooms, exterior painting, hardwood, gutters, and basement. I will work on getting the rest in better pricing on materials. Thanks again for all the advice. 

@Tom Hurford and @J Scott. Thanks! The contractor I am working with is great, but I know he is new in dealing with investors. I played around with his bid and was able to knock off the $13K I needed based on the items we discussed above. I will see if he will go for it. If not I will break apart the bid and sub out some of those other jobs. 

@J Scott I thought kitchens and bath labor, gutters, hardwood and painting were all a little on the high side. 

@Tom Hurford and @J Scott, sorry tagging didn;t work above!

@Tom Hurford

The house is 2400 square feet, brick. 4 beds, 3.5 Bathrooms, University Heights, OH (near Cleveland)

ARV: $240K-$260K

Initial Budget was $58K

Bid from contractor: $59K

Materials I am providing: $16K (incl 2k contingency) (in bold below)

Rough Scope:

• Landscaping (clean out window wells, remulch beds, trim bushes and trees)- L: $1845
• Masonry ( Tuckpoint Chimney, Tuckpoint exterior masonry around porch, powerwash brick) L&M: $1200
• Windows (Replace 16 Windows): L&M:$3600
• Roof (Inspect Slate Roof): $150
• Gutters (Replace all gutters): L&M: $1200
• Deck (Powerwash and stain): L&M: $500
• Front Porch (Scrape and Paint Iron Railings): L&M: $100
• Exterior Lights (5): L:$100, M:$200
• Kitchen (Complete upgrade, counters, cabinets, tile floor) L&M: $11,000, Appliances: $3,000
• First Floor 1/2 Bath (Complete upgrade,): L:$2000, M (supplied by me):$550
• First Floor Master Bath (Complete Upgrade): L:$4500, M (supplied by me):$2400
• Second Floor Main Bath (Complete Upgrade): L:$4500, M (supplied by me):$1800
• Third Floor Main Bath (Complete Upgrade): L:$2000, M (supplied by me):$1600
• New Entry Doors and Lockset (3): L:$300, M (supplied by me):$1025
• Finish Basement walls and ceiling (Frame, drywall, and Trim, 400 sq ft) L&M:$10,000
• Finish Basement Flooring (LVP): L:$1500, M (supplied by me):$1000
• Refinish Hardwood (1300 sq ft): L&M: $5000
• Electrical (Replace outlets, switches, faceplates, interior lighting): L:$1100, M (supplied by me):$1026
• Paint Prep : L&M: $600
• Paint Interior (floor (basement), ceilings, walls, and trim): L&M:$5000
• Exterior Painting (Garage door, house/window trim): L&M:$2500

I ran an initial estimate on a property, when I showed it to my contractor, before he went out to the property he thought the dollar amount and the scope looked good. After words, he came back with a bid that was about $18K more than I have budgeted. So now, I need to figure out the best way to cut scope and come under budget. I think I can negotiate some of his prices down, and that will get me about 5-7K less, but that still leaves a substantial chunk of budget to get nailed down. 

What do you look to cut first? 

My favorite way: I have an HML that will lend on 60% of ARV, they are fast and simple. I then have a private lender who will fund rehabs for a flat percentage. Its expensive money, but its easy, and frees up my capital to go elsewhere. The 60% ARV is tough, but forces me to get good deals. The HML is very hands on and knows my area well. He won't lend on a bad deal.

I would talk to you lawyer or SDIRA custodian. There are PLENTY of legal ways for the two entities to partner together.