All Forum Posts by: Andrew K.

I respectfully have to disagree with you, @jscott. 7 out of the top 10 high schools are located in Montgomery county including the overall #1 (Which has been for awhile) Walt Whitman.

http://www.usnews.com/education/best-high-schools/...

While I can't speak specifically to areas much outside the southern part of the county, which is where my specialty is (Bethesda, Chevy Chase, Kensington, etc,) that specific sub market I would argue is quite strong. The building activity in Bethesda alone is staggering. Some neighborhoods you can stand on a street and look both ways and see 3 or 4 houses under construction (infill developments) and most are already pre-sold before they finish completion.

Now, obviously the OP and you were discussing areas up a little further in the county, and as you mentioned they are quite different than the areas I am talking about, but I think the biggest difference comes from people tired of the commute into DC from areas further out. A lot of people are looking to move much closer to, and even back into, the city. That's why areas like PG are booming at the moment due to the affordability and accessibility to DC.

I also think @Shayne Brescia nailed it on the head about the delayed release of these foreclosure properties

Great answers thanks @Anson Young  and @Bill Gulley 

Speaking to your point, Anson, about locking in your price and cutting out competition: There is theoretically some upside to being able to take away a lot of the carrying costs involved during the work and also not having to pay out any realtor commissions. When you're dealing in a higher end area, such as the Maryland suburb I am, with a target price right around 900K, that's no small chunk of change. In my eyes, customizing exactly how they want leaves room for an even larger return as some of the items they would want cost more to do. Locking in a contract also allows my bank financing to be freed up earlier as well. I'm sure it's going to take a bit of work/headache to structure it though.

Bill thanks for your perspective. Yes, it definitely seems that there are a number of ways to do this. I bought the house directly from an estate off market so I physically own it now, so some of the creative financing is off the table, although I suppose I could seller finance for a while ;) . I guess as long as its put together clearly and through lawyers there's no cut and dry way to get it done.

Anyone else with experience with this?

I'm sure some of you have run into this before. A property I purchased in an amazing neighborhood has garnered some interest already (before even starting on any work) from friends/colleagues of friends. One in particular is very interested and would like to know how it would all work. Letting them have some control of customizing would need to be accounted for in how the pricing works out as well. I'm a general contractor so I have a good idea as to how to structure the selections and budget, but when it comes to the commitment to buy, I could use some guidance. How do you all structure a pre-sale deal? Of course, there would need to be a contract and a significant down payment up front to guard me against them backing out, but specifically how is this done? Any insight from people that have done this before would be much appreciated!

Got it. Thanks!

@J Scott

Would you mind sharing the name/contact information of the contractor the utility head recommended? I'm in Maryland too and can always use another good sub contractor on my bench. Feel free to PM me or post here. Much appreciated in advance!

@Chris K. It has nothing to do with the trust of whether the client is going to pay them. Normally, GC's are buying building materials for your job, funding any subcontractors, etc. That's coming directly out of their pocket. You're saying you're buying everything for them...building materials too? In that case, you're hiring labor. Are you hiring a GC to do this or just subbing out the trades themselves? That's a different can of worms. In that case I can see your argument for paying them after work is completed. A GC still needs to pay his subs. However, I'm not sure why you are treating it as a combative subject. You and your contractor should be working as a team. You're only as good as the people you hire in terms of finished product. There's no absolute right or wrong with anything, but I don't think it needs to be talked about in absolutes. If your contractor is providing materials (not finish materials), then it's absolutely reasonable to ask for a deposit. Do normal employees have to pay for the things they need to get their jobs done ahead of time in order to earn a paycheck? Contractors regardless of field (be it web developers, designers, architechts, etc) get deposits. That's a normal business practice

@Christina R. @Steve Morris

As a contractor myself, these conversations always drive me nuts. It's not just you guys, it seems to be all investors "can't find a good contractor." Good contractors are out there. They are. It's not rocket science to find one either. You should be able to tell pretty much off the bat if they present themselves professionally/ get you a bid in the time frame they say they will/seem to know what they're talking about. Biggest thing: Check referrals!! If you find a good contractor, treat them well and they will do the same in return. It really comes down to the "you get what you pay for." Investors seem to be notorious for wanting the lowest bid guy they can find. Getting better at being realistic about what good work costs will do wonders for you. The contractor's that last know what the job requires of them and the business expenses they incur (overhead such as licenses, insurance, etc) and must charge accordingly. I say this to potential clients all the time. Make sure you are comparing apples to apples when comparing contractors. No 2 contractors have the same expenses and overhead that's why you will see a range of numbers. The good ones are not in the business of making a quick buck on you and riding off into the sunset.

Regarding deposits, this all comes down to trust and professionalism. It makes me sick to my stomach to hear all these horror stories of contractors taking a deposit and running. Again, know who you are hiring. Do your homework. However, refusing to give a contractor a deposit ahead of time is just breeding unnecessary problems from the start. It basically says "I don't trust you" right off the bat. My unofficial policy is anything under 2500-3000 I don't ask for a deposit, but anything above I ask for the requisite 1/3rd down. @Keith Belzner is absolutely correct, in MD you can't ask for more than 1/3. I also have all my client's sign contracts that describe the exact scope of work, payment schedule, and other exclusions and qualifications. That way everyone is on the same page. There is a legal, binding, very clear document that spells out everything should a dispute arise. The deposit doesn't just help with the contractor's cashflow, it also signifies that you the client are serious. It's a commitment that you will follow through with the job and aren't wasting anyone's time. This contract is a safety measure for you as well as it binds the contractor to do what they say.

Thanks for the replies guys. Makes sense to me as well as long as the numbers work, it's just been an under talked about thing on the forums best I could tell.