All Forum Posts by: Justin Eaton

Kyle, i agree with @Thomas S. as far as down payment. Definitely put as little down as possible to purchase the property unless you have a specific reason to do otherwise. The only reason to increase the down payment would be to increase your equity and lower your monthly mortgage payment, however, a difference of only 2.5% in the down payment will have almost a negligible effect on these. The money would be better spent on some type of upgrading to one of the units. 

Myself, i do not focus too much on ROI when analyzing rental properties, the cash flow is more important (everyone is different).

If you have not already read, The Book on Rental Property Investing, by Brandon Turner, of Bigger Pockets, i highly suggest it if you plan to make rental properties a part of your real estate investing career. 

May i ask what town the property is in? I am also from South Jersey. 

Hey Guys! I have a question regarding LLCs. I currently have an LLC, which i have bought and sold all of my flip properties under. After investing in flip properties since January 2013, i have decided to get in to the buy and hold game.

I was planning on setting up a separate LLC from the existing flip business for all of the rentals that i acquire to keep things completely separate between the flips and rentals. The key thought behind it was to keep the rental assets protected from any law suit that my come up during future flips. This seems like the most logical thing to do and i am looking to hear from some investors who have done it this way or have done it another way and their reasoning for doing so.

Thanks and happy holidays! 
Justin 

Hey Ashley! I am a structural engineer from New Jersey as well as a state licensed home inspector. If we get called out to perform a structural evaluation in a situation like this, we charge $300 for a verbal consultation, $600-800 for a written report (includes the $300), and $800-1200 for signed and sealed drawings (includes the $300) which can be used for permits as well as spec for your licensed contractor to follow. Below are my comments based on viewing these small photos from my phone lol Photo 1: south foundation gap - It looks like a 2x6 cripple wall is resting on top of the foundation. I think the inspector is calling out gaps between the pressure treated sill plate and the block. Generally this happens during construction unless the foundation is settling. Recommendation would be to install sill anchors to ensure that the block to sill connection is firm and no uplift / shifting can occur. Photo 2: NE beam joint - It looks like the splice in the beam is at or near mid span and sag is occurring at the splice. General repair would be to install a steel post on proper size concrete footing directly below splice / sag. Beam should also be bolted together with thru bolts, nuts, and washers to prevent separation / twisting. Photo 3,4,6 - it looks like the main beam is supported by a series of wood post on a block or concrete pier without any footing. Block or pier is simply sitting on the dirt floor and has shifted due to lack of footing and wood post has shifted along with it. It is likely that they would all need to be replaced with a steel column on a properly sized concrete footing. Photo 5: termite damage to beam - Depending on the extent of the damage, the beam will have to be either replaced or can sometimes be scanned / sistered. In NJ, these repairs would require permit approval from the local construction office, which would require stamped and sealed drawings from a PE. Typically this will cause delays in closing. Definitely consider addressing these issues before you complete your renovations because they can certainly kill deals. Also, if you have tile of anything above these areas, they're prone to cracking during repairs of this nature. Hope this helps! Justin

Just to clarify, i did not perform any of the actual work as the GC. The concern stemmed from me filing for permits under my LLC name (owner in fee) rather than filing under a contractors license. Again, i did not perform any of the work. I acted as the GC and managed all of the licensed contractors who were also labeled on the permits rather than hiring a GC to do so.

@Manolo D. Completely understand your numbers and reasoning and i think the same principal can be applied to investing for sure. With all that said, I think it all depends on the strategy and end goal of the investor. 

@George P. They do bring up a good point regarding liability, and i think it is important to prevent or limit liabilities while investing in real estate. However, yes it does not have anything to do with the purpose of my post LOL! 

@Manolo D. Thank you for the input! 

I think regardless of how much you make working full time, $36k a year is still a significant amount of money, which ends up being a $72k swing before your consider your profits on the flips over the year. If you make $100k a year and spend $36k on a contractor your down to $64k. If you make $100k a year and profit an additional $36k a year because you ran the jobs yourself, your at $136k, before profit on the flips. 

There are obviously many different variables for each investor to consider when choosing between running jobs or hiring a GC. I guess the answer i was looking for in my initial post was to try and get a gage on the amount of investors who hire a GC vs investors who run the renovations, as well as their reasoning and opinions on doing so. 

Justin 

Patrick Liska definitely something I will look into, thanks for the input!

@Account Closed Yes i still choose every design item, this way i know how the house will turn out the way that i want it. 

Thanks for the engagement guys! 

Justin  

😂😂 FULL GUT!! Yikes