All Forum Posts by: Douglas Gratz

COs? He is confident he can finish within 1 year. He finished 14 townhomes in the middle of covid in 2 so I am confident in his estimate, but as a precaution, the AOS has a 3-month cushion. And yeah she could always back out and I would keep her $300,000 (this part of the AOS is IRON CLAD, I made sure of it! Once we start framing there is no circumstance she can get this back given the changes she made to the bones, shes locked in (but there's always a chance so we are trying to line up other buyers, and the interest is there (we are close to pre-selling the second lot). She has already paid the architects for changes she made (adding a 3rd garage spot by elongating one of the two garages which means steel in order for her to keep the basement) shes already put deposits on all her finishes. So yeah it's always possible but this buyer is 32 years young and very excited so my gut is telling me this is unlikely after assessing her commitment the best I can (so yes I have had it in mind, I have a consultant remember, there were many things I didnt think of that he made me aware of. As for suing her way out, the AOS is very tight, my agent made sure of it because of all her customizations, so she can try anything is possible.

@Mike Smith " On high-end construction, some buyers will walk because you have the wrong brand of appliances, the wrong color of cabinet pulls, etc. Many times you will have to refund their non-refundable earnest money or risk a lawsuit. The buyers will claim you didn't fulfill your contract so they will demand the earnest money back."

She picked out all her finishes so unless the manufacturer changes the dye that tints the color slightly, I don't see that or the wrong appliances as she has picked and put deposits on them already. I will be careful in making sure to stick to the AOS to the T so as not to give her any reason to be able to win a lawsuit. She's 32 years young and as I said above has put so much money into it already, I don't see her wanting to back out, but you never know. I can only prepare so much for something like that. I had my attorney look over the AOS before signing and he made some changes to protect me as much as possible, but it's pretty straightforward in terms of deadlines and we put a nice cushion in there to allow us up to one year 3 months to finish and it states that if there are any delays as a result of anything she changed than those delays are added into the cushion and since she changed a lot we have a lot of leeways there. So did my best to prepare for anything that could cause her to back out and try to sue

@Mike Smith Thanks! Appreciated as always, but an you get me that 6% haha..Just playing ….I needed that estimate, I came pretty close, using Google as a research on the time each step should take, but not good to use given every house is different and this is double the size of your average 3000sqft . I was having them most trouble because I am not sure what can be done at the same time., If I am correct, my builder said the budget is the draw schedule, so I assumed that to mean its in order by step, but to which items will be drawn for at the same time, I was loss. Common sense gave me a good idea but I wasn’t sure and i had to account for deposits on items with a longer than usually lead time. I was pretty close by month 5 i had 550, 6) 800,000 and full amount from 7 on…..

It comes out to a lot less in total for interest, Before I started I thought it would be very close to the % of the whole , at 10.99% its around 70k in interest for a year. I guess if it’s a SPEC home, time on market can crush your profit. I am thankful it’s pre-sold, that would get stressful, however data says it would sell in less than 30 days, but got forbid more banks bankrupt. You have to be a stupid bank to lose in that business, to much risk taken, keep it average maybe al title above average risk and the profit all yours! You. Borrow others people money to lend, that’s like printing money lol…..Isn’t there super regulation these days after 2008, I mean my loans are so hard to get, but I guess different type of bank VC’s and such, but still. I was talking to a an old school banker today, had to be 85, still working , talking about yellow fever or maybe it was the Spanish flu in 1918 haha. Nice guy though…

 Yeah I have thought about this a lot, the inspection process, I have money set aside. The first think I learned was if the money stops flowing it can really mess up a project

 I am just trying to get an idea for my partner. I guess since no one can give me an estimate on this website, ill just assume 100k every month.

@Mike Smith I have an important question, I want to figure out how much interest I will be pay each month, using this spread sheet , assuming it will take 1 year, can you map out how much I will be drawn each month. For example:

M1: $100,000

M2: $245,000

M3: 245,000

M4: 350,000

M5: 500,000

M6: 700,000

M7: 700,000

M8:1.1M

M9 1.1M

M10

M11

M12….

 Oh, I know I do but the stress of financing (all the waiting and suspense) compared to the stress’s ahead are two different monsters. The former was completely out of my control where as the problems I will face during the build, I will have some control over and I can deal with that a lot more than having no control. I can solve problems when they arrive and can do things to avoid them, to me yeah it will be stressful but not nearly as stressful as things that are at the mercy of others.

 I never disagreed with that, but I trust my builder and agent who are not in over their heads. Since they know what they are doing I believe things will go well. Especially since my builder has his own money in it.

Can you elaborate on your point of view of why it is Balsy? Just curious...

 Damn bruce cut me some slack and let me enjoy something. I am focused on the project, but just because you been there done that doesnt mean its not something I would like to enjoy.

 thanks!