All Forum Posts by: Dave Silva

I'm sorry, I may not have been clear- He is paying me. This is coming from the financed portion of the project. The bank will give him a draw for work completed and I will be paid. On paper I am a sub.

I'll do a lot of projects out of pocket but most will be funded by the renovation loan.

The work-arounds we have discussed may be good enough- as a sub I markup the material and do the work for min wage.  And maybe we don't document every single hour worked.



  

The contractor is a close friend. He did my first reno/rental  before he got licensed.  He's learning the rules.

It's more than just painting and trim, it's repainting the whole house and that will be a fair sized line item in the reno budget.  I may also do most of the work on the roof.  The plan is to make a few thousand in cash on the reno to fund extras and some rehab on my current house.

The contractor believes he needs to show workers comp paid for all the 1099s.   I've asked locally and that seems to be the consensus. 

I'm looking at a renovation project that I would live in for a couple years. The bank requires a licensed contractor to do the work but I can work under him for whatever I want to do myself.  The guy I have in mind says he would need  19% for workers comp (we're in North Carolina) .   I have excellent health care from my day job so I really don't want to throw that money away.   I'll probably just work on some interior paining and trim.

I've researched in on the NC website. It looks like he has to show workers comp is paid for all his workers and subs.

We discussed some work-abounds, like  me marking up the materials I buy and only earning min wage for the labor.  But I was hoping there might be a better solution.

any ideas?

Three years ago i stopped to look at a waterfront house in Eastern NC. It was a Homepath / "first look" deal for $104K. Needed a roof, deck and siding. there was water inside and interior floor damge but I really loved it. A builder friend said we could get it back in shape for about $25k. I pulled $20k form my TSP (federal 401k) and we got a renovation loan. It was not until closing that i learned there would be no payments for six months as the credit union treated it like a building loan. Everything went pretty well. the house is gorgious, we moved in, it was great. But the tenants we had in our old house pulled out with no warning a couple weekes before Christmas. We were still too stretched from the reno to carry the loss and the commute had been a burden so we moved back to our old house. (40 miles apart) The waterfront house now rents for $450 over the mortgage. A realtor put it's value at $180K. So in the end i have some decent equity and cash flow and other than the stress of moving twice, i really had a blast.

we've since decide the waterfront house is in the wrong place for our family and we really need a subdivision with safe quiet streets for our two little boys.

I'm about five years from retiring from the federal govt and I'm looking for flexible income in the future.  I want to kill myself in the winter and have some free time in the summer (wife is a teacher) to get the most time with my boys.

Today we are bidding on a HUBZU (ocwen) house and hopefully we'll get the subdivision house my family wants. But I'm just thinking ill have TWO good rentals and after the reno I'll have some more equity to augm my retirement.

Over the next few years i'll try to get some more deals. Maybe try to flip something instead of rentals. 

Ultimately the goal is to replace about $40-60k in anual income working full time on this after I retire from the government.

Looking forward educating myself and hearing form others with simallar stories