All Forum Posts by: Account Closed

Hey BP Community,

Looking for someone who has experience planning apartment complexes from scratch: specifically how to know what size each unit should be, whether to include washer/dryer hook-ups in the unit vice a community laundry room, considerations for a clubhouse and pool, etc.  I'm sure it depends on comparable apartments in the area but I'm hoping to connect with someone who has experience with this process or a resource on-line I can review.

Thanks,

Vincent

Yep.  And of course, the nice thing is you don't have to lock yourself into one system.  If you do the demo and final touches on one house, maybe on the next one all you need to do is a walkthrough beginning and end and that will suffice.

Best of luck!  Wish I could do all those things you know how to do...

Reggie,

Depending on how handy you are I highly recommend you do as much of the work you can, for starters.  Not only will you save money but you will gain an understanding of the work that goes into a flip so that as you develop your team and systems later, you'll know which jobs you'll want to keep doing (if any) and which parts you want to hire out.

As an example, I typically do the initial clean out and removal of old light fixtures and appliances so I can get a good feel for what all the house needs.  Then I let someone else do the paint and flooring, and I come back at the end to install the new fixtures and appliances, as well as do the landscaping.  This allows me to put the finishing touches on the home.  (If I am adding a closet or removing a wall I will hire a GC.)

This system works for me because I only do one house at a time as a side gig, but for folks who want to make this their full time occupation they may want to spend their time finding deals and let someone else do all the work.  You'll have to find the balance that works for your situation.

Hope that helps,

Vincent

Perhaps you want to shop around different insurance companies. I have two rentals in an LLC and am not considered a commercial policyholder by my insurance provider, USAA.

Hey Adam, I will address your questions with a story:

When I was flipping houses in Western Nevada in 2014 as a side gig, I brought in a friend from my normal work on one particular house.  We had known each other less than a year but we seemed to hit it off, and besides--he was pretty handy and had some capital to work with, so I figured why not?  I hand-wrote an agreement specifying how much money was involved, what the splits would be, who would do what work, and what would happen if everything went sideways.  I copied the agreement and we each signed both copies, then each kept a copy.  Everything went fine with the first house and when it closed we made hand-written notes to the agreement letting the proceeds roll to the next house, which also went well.  By the third house and on we simply took care of things verbally.

Due to a subsequent reassignment, we later parted ways but we did so happily, still friends, and each a little bit better off financially.  Now, I fully expect someone to reply to this post telling me how stupid that was, but it worked for me.

And that's the point.

You have to find an arrangement that works for you and your partner(s).  There is no magic formula for what will work and what won't--that needs to be negotiated based on who you're working with and the details of the project.  If you do not feel comfortable with a "cocktail napkin" arrangement like I had then you should probably seek legal counsel to draw up something that will withstand the scrutiny of litigation.  And an accountant can advise you on the tax ramifications (in my case, we did not split things 50/50 because the houses were in my name so I paid the capital gains at the end of the year, but I did provide him a 1099).

This does not directly answer your question but I hope it helps.

Best,

Vincent

@Syed Khan  I cannot explain what a binder is any better than Google can but I know it saves me money on flips when I buy and sell with the same title company.

For starters you need to talk to a local knowledgeable realtor to get an accurate ARV for that particular house, especially given the busy street (i.e. may be lower because families with young children won't want it). The ARV will tell you whether there is enough room in the numbers because the rehab and holding costs always end up more than you expect. Always.

I typically expect 1% of the sales price but it could be slightly less if you thought ahead when you bought the property and purchased a binder with the title company. Or it could be more if your buyer is using a VA loan.

Hey Shane, welcome aboard and thanks for your service.  Long distance investing can be tough, especially from half a world away.  Your best bet might be to stockpile the special pays you'll receive while in Bahrain and as much of your regular pay as you can so that when you get back you have some capital to work with.  Shore duty and some money to work with could be a potent combo.

Good luck and have fun in Manama!

If these properties are performing and you would not otherwise be looking to offload them then you might be better served to find the capital elsewhere, if possible.  Done correctly you can invest with little money out of pocket.  Plus, there could be tax ramifications of selling your rentals.

Lots to think about...