All Forum Posts by: Clayton Barnes

If you're paying them what you were going to pay a GC as well as giving them 50% of the profits what are you getting out of the deal? Couldn't you just hire a GC and keep 100% of the profits, or hire their company as the GC at a fair rate without needing to partner with them? This sort of just sounds like they're using your money to get a really great rate for the work they're already doing.

Shoulda, coulda, woulda, right! Glad you've been able to recover and I hope your REI career takes off in a big way.

Ask your contractor what his worst case guess would be. If you go with that assumption you should be able to run the numbers and see if it still seems like it would work.

On a side note I'm confused on what you're describing. Are you saying there is a "huge" crack in the foundation that is raised up? I'm surprised that foundation work is allowed by the HOA as it could potentially affect the structural integrity of any attached units etc.

 Our county does show all that, but it is still wrong a significant portion of the time. I think you're absolutely right that measuring should be part of your due diligence.

It was more said in jest, than any feeling of actually being upset. The home buy wasn't really an issue. We had hit a point financially where we wanted to buy a home to live in. We bought and value dropped slightly, but I still had a home that was well within our budget and a great interest rate on the mortgage. The value has recovered and we've got about 60%+ equity in the home. It'll make a great rental when we decide to move. So I'm in a good spot. It just made me a bit jealous seeing other folks buy a year later at better prices and get an $8k tax credit etc.

Is it a flip or a rental?

If you're shying away as an investor who is willing to put work in, then it might be a total no go for a buyer who wants something move in ready. I think this has a lot of regional variance. The farther south you go the more common and therefore less scary termites become to potential buyers.

I'm a newbie, but from what I've gathered the idea of waiting until the crash is sort of baked into what people mean when they say "the right price." They're using a calculation in their strategy that is accounting for potential bad times. So they aren't buying properties that will suddenly be underwater if property values or rents start to drop. If the market is inflated and people are buying everything up, then their right price isn't going to come around very often. That may mean that they're holding onto their money until a more favorable market arrives.

However, I've got an amazing knack for buying into things at exactly the wrong time. I bought my first home December '07. I sold two beat up old vehicles two weeks before the cash for clunkers thing was announced and the list goes on. I'm now looking into real estate investing, so that probably means the next crash is just waiting for me to write a check.

It certainly seems worth having a backup plan, but not doing something that doesn't seem morally wrong out of fear that it may some day violate regulations seems premature to me. I wouldn't buy a property that needs to airbnb successfully for the next 30 years, but if you can increase your profits over the next few years and just go back to renting it as a normal unit why not?

If you're looking at holding it how do you end up on cash flow on potential deals you're seeing? Would you be losing a ton of money until the progress part comes around?

If you can find a property that cash flows reasonably now and has good potential growth, then it sounds like you're in a good spot even if that growth is several years out or something changes and the path of progress goes elsewhere.

Can you contact the HOA or get their policy to figure out why they changed the roof? If they replaced it due to it being completely shot and ruining neighborhood appeal, then you may have serious issues. If they did it proactively to prevent that, then it may not be so bad.

A house near me has been abandoned a little less time than that and the roof has rotted through. Due to the water going into the attic the ceiling has fallen through etc. So if you look in a window all you see is moldy attic insulation covering the floor. Beautiful natural light though! It's probably a complete gut down to the studs and possibly even replacing a significant portion of those.