All Forum Posts by: Davey V.

Thank you everyone for your advice, everyone has great viewpoints!  I will try speaking with him again.  Like I said, the first time I did the response that I got was "no I am fine".  But I know that he was not fine with everything.  We have another lot under contract so I will see if the price gets adjusted.  I have a total of 3 lots for him to build 3 more on now.  So this will dictate how it will go going forward.   

@Jay Hinrichs you are correct, I have no idea what he is making. I doubt that he would tell me, and I don’t want to know. Your arrangement with your GC is really clean. I wish that I could set up our deals in that manner but he doesn’t use a lot of subs, they are his hourly guys and he has a ton of them. That muddies the water a bit.

@Lucia Rushton I agree with you and have had a brief conversation already. When I sense issues, I go straight at them. But I don’t feel like I got the whole story in return. So there are more discussions to come!

@Bruce Woodruff I do believe that he is irreplaceable, it’s good to hear your view from a contractors perspective. But…..to be fair, he knew what the work entailed, he set the price with no counter from myself, and it went to plan. It wasn’t until I made a profit that it was an issue. Like Matthew says, I took all the risk, so why am I not allowed to profit…..

But again, I understand your perspective. I’m not a greedy person in the least bit. He is building for $131 per foot in a small town in Texas, but that seems to be a fair price. I do 2 houses at a time as a part of our agreement. In order to keep him happy, I may try to give him a few more dollars per foot. I really appreciate you guys input.

I have completed my first spec home sale, and it went extremely well. I had a GC build it turn key and it went under contract before it was completed. I made quite a bit on it and it was a complete success.

I did nothing except supply the lot and money. He picked all the finishes, built it, and worked with the buyers once we got it under contract. He is someone I know well and have done flips with. I am out of state so he managed it all from start to finish.

We have a contract to do a few more but I was wondering if any of you share your profits with GC’s, or if the price they quote to build is enough. I have found a honey hole and want to keep this relationship going well…..so what would you do? I could sense that he was unhappy with how much I made.

@Carolyn Kincaid I invest out of state and would never use a “passive” agent. My person hand picks properties and sends them to me, no lazy automatic emails. You can get on Redfin and set those up yourself.

I once tried to use an agent similar to what you are describing 2 years ago…..to this day I still get properties sent my way from the automatic search. She has never once reached out to me to ask if anything interests me.

Go with your gut and find someone else. Bad agents are a dime a dozen, find someone that matches with your expectations.

@Micah Brandel answering your phone and responding to email in a timely manner is what usually gets my attention. I can’t believe how bad some people are at that. If they don’t respond or react quick enough in this market, how do I know that they can secure what I want when time is of the essence?

If they are new, but show me they work hard, I will always give them a chance. The best agents make you feel like you are their only client. Very rare.

@Zee Anon you can create a regular LLC, it's nothing different for hard money lending. Since you are in Texas, you will have to register in other states as a "foreign entity" and abide by their states rules. I hope you have an attorney you are working with, and if not, I can recommend one for you for any Texas deals you may do. You will need to work with a local attorney in each state that you are lending in though.

 I do hard money lending in TX and AZ. It’s fairly simple. As long as the funds are being funded from your personal money, you do not have to have a mortgage brokers license. And you also cannot lend on primary residences.

@John Teachout - Yes I will build in likely a 2% origination fee as well

I have someone that I am wanting to do hard money lending for. My realtor told me to structure it as 12% interest for 6 month term, 15% up to 12 months, and 18% to 18 months.

Now my question is, do most hard money lenders take 1% interest only payments per month? So if the deal is 100k, I am repaid 1,000 per month and if it sells in 3 months, I only make $3,000???? That seems like a joke and can’t be right....is it? What am I missing? Who in their right mind would risk 100k for that kind of return?