All Forum Posts by: David Weis

We work under a GC's license doing tons of remodels. We use our own liability insurance. We do not need to be licensed to paint, do flooring, drywall or lots of other things. We do use a licensed plumber, electrician, roofer, etc. for items that the city or county require a license for. We also have the GC pull permits and the other licensed contractors will add their names to the permit. It is all legitimate, legal and ethical.

As an investor and contractor, my advice is never have your first house be mold, Chinese drywall or foundation issues. No matter how great the deal may seem. First, they are not easy repairs and are very expensive. Second, if you are an honest person you would have to disclosure these issues to the next buyer and very few buyers want remediated houses like these.

As an investor and contractor, prices will vary based on location. Here in Florida I budget $40 SF for a basic remodel with cheaper flooring, lights, etc. A better remodel would be $50 per SF. A higher end remodel is $60 SF. 

You never, ever, ever want to underestimate and then have to go scramble for more money. Always budget high and be safe.

In addition, a contractor is just giving a best estimate. There is no way to see through walls or floors. Things will change as you start demo work.

Lastly, keep changes to a minimum. Changes cost money and extra time.

Having said all that, I looked item by item and his prices seem reasonable. I agree with him that if you are selling the house you want to look closely at the kitchen. If you can enlarge a kitchen, do it! His cabinet supplier should have a designer that can work with you for free.

I think his electrical is about $5K too low if he is replacing all knob and tube wiring and updating panel.

In regards to flooring, if you are selling the house avoid cheap flooring. That is not a place to cut corners.

"The current administration wants the working class to become the working poor. So, potential home buyers go away."

I have no clue why you say this other than a dislike for the President.

As an investor, contractor, builder, remodeler here in the Tampa Bay region I can tell you that the "working class" like roofers, painters, carpenters, floor guys, metal framers, stucco, manufacturers, distributors, drivers, realtors, etc. are all doing very, very, very well thanks to the economic policies of this administration.

If your definition of "working class" is simply retail or food service, those jobs are meant as stepping stones.

We have a private money guy in Florida that wants to pull in some of his friends for our Florida flips. Basically pool their money together and he would manage the fund. Does he have to do any SEC filings? It's simply people pooling their money together to loan to a company that does flips. There is no "public offering." I believe he would be paying each private lender 1% per month on their money.

Anybody have experience in something like this?

Please note - I am a residential rehabber. I have never done commercial properties. But I have one to offer now. I am helping someone with several residential properties and she has this one commercial property as well. The address is 1930 E. Hillsborough Avenue in Tampa, Florida 33610. Hillsborough Avenue is one of the busiest streets in Tampa. The property does need a total rehab - gut, new plumbing, new electrical, new doors, new flooring, etc. On the back of the building part of the roof is missing and subsequently a small tree has grown up. You will need new roof trusses on the back. But the property is a block structure, on a concrete slab, on a busy street. Right now, it is one open space in the front. But it can be divided into two identical 1,500 sf office spaces. As an experienced rehabber, I would put the cost of rehab at $100K. It might even be less.

Loopnet puts the rent at about $20-$25/SF/YR. I have a friend in Miami and he told me the formula he uses to value a commercial property is: rent / 2 (for expenses) then divided by .15 (cap rate). REMEMBER - this is his formula. Yours may be different. So if the rent is on the low end at $20/SF/YR times 3,000 sf, that equals $60,000. Divided by 2 equals $30,000. Divided by .15 = $200,000 value. of course, you have to consider the cost of rehab and lost rent while the work is being done.

I am asking $125K for the property. I believe it could be resold at about $399K, worse case scenario $299K. Of course, it would be great as a buy and hold. We may possibly rehab it and resell it, but we are very busy right now.

Here is a video of the exterior

Here is a video of the interior

Here is a Costar Report

Here is the Property Appraiser's info on the property

Here are sales within a 3 mile radius (from a commercial appraiser)

The building is in the 33603 zip code in Tampa. It is 2 stories. The second story has twelve 625 square feet apartments. The rent would be $800 a month for each apartment. The first story has four 1,875 square feet retail/commercial space. Rents are $20/sf/year.

Asked a commercial appraiser for help and he said he had no idea since there were no multi use properties sold around there in a very long time, thus no comps.

Building is on very busy street. All side streets have residential houses.

I'm working with seller to buy the property. He is waiting for me to give initial offer. Building needs $300K of work.

Thanks for your help.

I'm looking at purchasing a property here in Tampa, Florida. The owner has 16 properties. An IRS lien was filed in 2011 for $176K. But it was not attached to any property. It was just a general lien against the owner in general. The house would not sell on the open market for more than $70K. We are offering $50K.

I'm assuming if we buy the house, all the money will go to the IRS. Does that sound correct? Would the IRS stop the sale and demand $176K be paid for the house?

My business partner and I are rehabbers. Been doing it 4 years. We want to move to buy and hold of multi-units. We both have backgrounds in condo and HOA management.

We have an opportunity for a 55 unit MH park (including the land) with on site laundry mat. The purchase price is $1.4M. I'm intrigued mainly because I am following development in the area and believe the land will be worth around $2M+ in about 3-4 years.

The current owner nets around $6K per month. But I believe his rents are low. I think we could increase by $50 per month. Each unit is sub-metered for water. The unit pays their water plus $10. So that's an exte a $550 per month.

We will certainly do our due diligence inspecting everything and our controller will go over the books. Anything in particular we should look for/at?

Down here in the Tampa Bay area, inventory is very low (1.6 months). House prices have risen to the point that even crap homes are going for top dollar. No one is negotiable. Houses are being listed on the MLS and only above asking price offers are being considered. So we need to lower our costs.

Right now, I use a combo of hard money and private money. Hard money gets paid 4 points at closing and 1% per money. Whatever the hard money does not cover (closing costs, down payment, etc.) gets taken care of by private money at a straight 10%.

I would love to find a bank willing to work with a rehabber like myself. I'm just looking for a line of credit at say $50K - $100K. I have a high FICO score, no bankruptcies or repos and a steady income. My P&L for taxes from the business shows a loss, but that's normal in my business according to my CPA. The business is 4 years old so obviously we are doing something right. We do have collateral in the houses we hold before resale. Right now we have about $1.5M in houses and they have less than $1M in liens (from the HML). But they are going on the market soon.

Yet rehabbers are toxic to banks. I don't understand why if I have been playing by the rules (paying off my loans) I get punished for other rehabbers. And yet someone wanting to start a poodle grooming business is welcomed with open arms by banks.