All Forum Posts by: David Lowe

Thanks for all the great feedback! Sorry for the lack of clarity; he is offering 5% over the duration, so I would make $1250 after four months (15% annually). It sounds like pretty much everyone says it is a bad idea; that's tough to ignore.

@Account Closed That's an interesting point. He has done quite well as a general contractor and I think he and I could help each other out. I know both wives are on board, but maybe it is better to wait until he has flipped his first property before investing with him. I know he has taken loans from his dad (my father-in-law) in the past and has paid them back, but I haven't seen how he handles adversity if a project goes sideways.

Thanks @Thomas S., you hit the nail on the head. I figured if things went south I would be the first he would pay back because we're family. That may not be a great assumption, but I also don't think I will be in a position to ask for the first lien on the property with only a $25k investment. Do you have any tips to mitigate the risk? Is it common to include a penalty if I'm paid late, or a clause that says the money + interest is due in 4 months, regardless of the status of the house? Sorry if that is a really basic question.@Thomas S.

@Chris Lemire Thanks for the feedback! 5% seemed low to me as a lender as well, so thanks for the input. Right now the money is sitting in a savings account making a sweet 1.75%, so 5% would be an improvement, albeit a much riskier option. Thanks for the input on the paperwork. Are there any clauses you have found particularly helpful in the past? The remaining funding is coming from my brother-in-law as well as 4 other investors, who are each investing between $25k and $100k. I will make sure to see what collateral can be claimed in the event of a default, especially if the loan can't be secured against the property.

Unfortunately, @Robert Kinsey's post was removed before I had a chance to see it.

Thanks for the tips!

My brother-in-law is a contractor with plenty of experience and I believe he does good work. He has seen my success over the years with buy-and-hold properties and is interested in getting into flipping. He is looking for investors among his friends and family and has asked if I'm interested. He has a house locked up that is well below market value and will be doing the work himself (along with his subs). He has 4 investors already and is looking for a few more, with people investing between $25-100k. I am considering investing $25,000 as well. It sounds like this would be considered a personal loan, secured against the house. He is offering a 5% return on a $25,000 investment, and anticipates needing the money for 4 months. Is this a good deal? Are there any clauses I should make sure to include before signing anything with him? I am considering investing with him because I am having a hard time finding SFRs in Charleston at the moment and don't like having investment cash sitting in a savings account. His wife has a good job, so I am confident in his ability to pay the money back even if something bad happens to the house. He is trustworthy and does good work. I have never been on this end of a loan before, so any advice or tips would be much appreciated!

@Sarah W. I am still actively looking for properties, but not specifically for vacation rentals at this point. I always keep that as an option when I run numbers on a property as a possible exit option and at the time I wrote the post referenced above I was actively looking for a vacation rental, but my experience so far as been long-term single family properties.

I was considering a property for a vacation rental a few months ago and got some great feedback from the BP community.  I don't have experience with John's island (and the particular deal I was considering didn't work out), but maybe this thread will help a little bit.

https://www.biggerpockets.com/forums/48/topics/385...

(The post was titled "Vacation Rental Advice" in case that link doesn't work)

Thanks for sharing your experiences with me. I feel like I can make a much more informed decision now.

I just got the inspection report back on a house I am considering. The house has polybutylene pipes and I have been reading a lot of nasty things online about this type of pipe. I plan to get quotes from some contractors to replace all of the pipes, but wanted to see if you guys have any experience with these pipes. The house is a 4-2 located in North Charleston, SC and was built in 1996. The report says the pipes have brass fittings (rather than plastic) and there are no apparent leaks at this point. Is it worth replacing the pipes now, or should I wait to replace them if/when they break? Any idea of a cost range to replace the pipes? Would you buy a house that has polybutylene pipes as a long-term buy-and-hold? The seller is already bringing money to close, so I think it will be difficult to get them to cover the cost or to lower the purchase price. (House is $160k, rent between 1,400-1,500, needs new HVAC and water heater sooner than later, plus $1000-2000 to make rent ready)

Wow, thanks for the great responses! I have an inspector coming to the property on Thursday and the seller has agreed to pay for a structural inspection for the truss that has been repaired. I'm still learning the ropes in South Carolina, so I appreciate the feedback!

I am in my due diligence period on a SFR in Charleston, SC. The seller purchased the house 6 months ago, but is selling now due to a divorce. Someone else had already offered on the property (and had an inspection), but their offer fell through due to financing. As part of my initial offer, I requested any previous inspection reports, even though I would get my own inspection performed before buying the property. The seller did not want to provide the reports, but I proceeded with my offer anyway.

The offer is "as-is" with an inspection clause (the seller is already bringing money to the table to close, and has indicated that they will not pay for anything that we find upon inspection). Because we are purchasing the property "as-is" the seller wanted to update their disclosure forms. The previous inspection had revealed that one of the trusses had been cut. The seller hired a contractor to repair the truss sent us a copy of the invoice (for $165).

I plan to hire a structural engineer to inspect the truss, but I sure would feel better about the purchase if I could see the other two inspections that have happened on the property within the last year. It feels like the seller is trying to hide something (considering their original disclosure omitted the truss repair), but this could just be the typical nerves that come with buying a property. Are there any rules in South Carolina requiring seller's to provide previous inspections as part of their seller's disclosure? I feel like this was a rule in Georgia, but I could be mistaken.

Thanks!