All Forum Posts by: Doug W.

Congrats on the ground up construction. How exciting. I did a build in 2016 that my family moved into and we love having been able to plan and pick everything in the house. And, like you, I feel constrained on what I can do on my flips given the footprint of the homes (built mostly in the 1940's - 1950's) and it's frustrating when a potential buyer "complains" about certain things like they are buying a brand new home. 

That being said -- I can't believe that you are 12 months into a flip and haven't even passed rough-in inspection yet. Something is way wrong with that situation, eh? 

Best of luck with the build and your future business and thanks for journaling it here for all to see and follow along with. @Rachel Imhof

Hi Luke,

Moving a gas water heater includes moving plumbing and finding a new place to vent the exhaust gas. It looks like that WH vents into a chimney of some sort. Moving it to another wall may be a "no go" if you can't vent it properly. 

Originally posted by : @Dan Bernstein

You can sell a primary residence and take $250K out tax free and $500K if you are married.  

That is only the (current) case if it is your primary residence and you lived in the home for at least two of the five years immediately preceding the sale. 

What the duck?!

@Darshan Patel

I think it depends on who the GC is. I did a new build that cost a significant amount and my deposit due at signing was only $8k. Draws after that were in the six figures and they happened after certain work was finished (foundation, framing, etc.). 

I am doing the 40/20/20/20 on two rehabs right now and one is a total gut while the other is a remodel on a 5300 sqft home. I find that the GC is very motivated and incentivized to hit the milestones and get paid. 

I pay my current GC four draws: 40% deposit at contract signing (which I typically don't sign until the day I close on the house) 20% after the county concealment inspection is passed 20% after the county final inspection is passed 20% after I approve of the work during my final homeowner walk through (after paint touch up and misc items are completed -- or basically on the day that we both expect none of his guys or subs will be coming back to the house again)

I always go see the property first without a contractor. If it's a listed property my Realtor will go with me. If it's a private sale I will go without him. 

I do my walk through, take photos and notes, and then go home and sit at my computer to determine my estimate. By this point my Realtor will have sent me comps based on what I intend to do to the property (i.e. take it from a 3/1 to a 4/2). 

I include an addendum in my purchase contracts that state that a seller must allow me back into the property within 24 hours of ratification. At this time I take my GC with me and I've already completed my scope of work and rough design plan. We walk it together, talk at a high level, and then he leaves and writes up an estimate. 

I know my farm area well. I know what a bathroom costs me, a kitchen, refinishing hardwood floors, painting, plumbing, electric, HVAC, roof, etc. This is what helps me determine if I can buy even before I have a GC estimate for the work.

Good luck. 

$160,000 sales price

-$9,600 Realtors commissions

-$1,600 closing costs (assumes 1% of sales price)

-$33,000 renovation

-$1,320 closing costs on purchase (assumes 1.2% of purchase price)

-$110,000 purchase price

= $4,480

Now subtract your costs for insurance, utilities, lender fees, and cost overages. How long will this take from settlement to settlement? 

J Scott's Basic Rehab Spreadsheet

Each rehab is in its own LLC so the bank account and credit card are specific to that property only.

I use QB online and Dropbox. The latter I use to scan documents with my phone's camera along with keeping digital copies of everything.

The only paper that I have is building plans and a notebook I use to scratch notes into.