All Forum Posts by: James Bowie

@Jason K Green We have been using Podio for about 5 years to manage both our investing business and our hard money lending business. There are a couple of resources for RE investors both for fee and for free. The first couple are pre-built solutions that are available for a monthly fee. There are also developers available that can help you build your own system for anywhere from $20-$200 per hour.

Here are a couple of options (I have used them but have no affiliation with any):

• REIFlow - prebuilt software for Podio REI
• InvestorFuse - prebuilt software for Podio REI
• Upwork.com - you can hire developers here that can build something custom for you
• Globiflow.com - this is a custom workflow engine that can automate your workflow, but it's totally DIY. Globiflow at $9 a month combined with a free Podio subscription is a great starter option. 

As an added bonus, the Globiflow community forum is full of helpful users that will answer questions just like BP, but be forewarned that building your own system can be a total time bandit.

As I mentioned previously, I have no affiliation with any of these vendors other than as a user. Feel free to reach out to me directly and I'd be happy to give you my thoughts on each. It appears we are just down the road from each other here in OC.

GL! -James

I'm with Joe Homs , age and goals plays a role, as does luck. In general make good decisions and in times like this when the market gets heated, stay lower leverage. Over the last year I have been shifting resources away from flipping (higher risk/higher reward) and more toward hard money lending (lower risk/lower reward). Put a different way: If you have multiple "irons in the fire", try and move some toward ventures that are more stable if you feel a downward trend coming. Take Care! -James

Irvine is a really tough competitive market. It might be better to focus on an area that is less "cookie-cutter" and the home are older. In order to make all of our deals we've had to buy properties from OC, LA and IE. Good luck!

@Ned Micic Banks and hard money lenders will always like to see a lease in place when evaluating creditworthiness of a borrower. 

In today's lending environment, the question is less "can I get financing" and more "what will my financing cost"? Start by asking the bank that you have a relationship with if they would consider loaning on your property. Next, talk to some local credit unions as they can often be a good source of funds.

Take time, talk to as many lenders as you can, and do your homework. You will get the best rates from a conventional "bank" - but hard money lenders can also provide shorter term capital at a higher rate of interest. 

Don't be afraid to start calling around to local banks/credit unions and asking questions. I think you'll find that once you talk to a few people, you can start comparing their answers to decide who you want to trust with your business. Just make sure to do your homework - even if the first lender you talk to sounds like he's got the best deal in town, make sure and talk to 3 others just to verify it's true. Unfortunately I've found there is no substitute for good old fashioned due diligence.

Good Luck!

@Manolo D. Of course you are correct when the contractor has a legitimate claim. That's why I added the last sentence to my comment. Regarding the bonding company, I was not insinuating that you should not settle the dispute. 

Further explaining my comment - It has been my experience that many contractors use a lien as a means to stop an investor from selling a house. In that sense, bonding around it would allow you to sell the property and then address the lien separately. Of course you would still have to address the lien, but you could do so without having to make thousands of dollars of interest payments while going through the arbitration process. 

If the contractor completed 50,000 worth of work on the house, but was only paid 35,000, you could be facing a lien for 15,000. While it's true you have replaced the house with the bond, as an investor I would much rather address a 15,000 lien with 15,000 at stake, not by holding my 850,000 house hostage over 15,000. 

That's more the point I was aiming to make. 

@Manolo D. @Jennifer Duke True, the contractor could post a lien, but most contractors don't understand the legal ramifications that occur after the lien is recorded. For example, he would have to follow up by filing a law suit within 6 months or the lien wouldn't stick. Either way, you could still sell the house by bonding around the lien, filing a complaint with CSLB to go after his bond, and then fighting the contractor in court. 

Usually when they file the lien they don't think it all the way through. Most contractors think that a mechanic's lien is a big deal and that they can use it as a high leverage point, but to the experienced investor it's really a non-issue if you know your way around the legal system. The assumption, of course, is that we are considering this lien to be in dispute, or not justified. If the lien were justified, my advice would be to pay your bills. But that's not the case here. 

Wow, that sounds like a nightmare @Jennifer Duke. It really frustrates me when people don't do what they say they are going to do. 

I am based in Orange County and have a lot of experience. For what it's worth, there isn't a whole lot I haven't had the unfortunate experience of dealing with myself at one point or another. I've been at this 7 years and completed about 200 flips all right here in Socal.  

Give me a call, I would be more than willing to help in any way that I can. At the very least I can go through the numbers with you and compare them against what we are used to paying for construction here in the local market. 

Even though there isn't an operating agreement, it doesn't mean that you don't have options, legal, or otherwise. 

So sorry to hear that. But I really mean it when I say I'm happy to help in anyway that I can from a completely altruistic standpoint. 

-James

@Anne Faber If I were in your shoes I would probably take the following approach: 

Try using a service like Angie's List to find 2-3 handymen/contractors that can walk through the property with you and provide you a bid based on a clear scope of work to get the house up to the condition you are looking for. Set these appointments up on the same day and space them about an hour apart or so. 

Next, see if you can find a contractor or experienced rehabber through your existing network of friends and family that you can trust, that is willing to be a neutral 3rd party as you meet each potential contractor on site. That way you have a second set of eyes and ears with you to help you determine whether or not your are getting a straight story from whomever you interview. If @John Tower is willing to drive down and help you that's great. But I think this only works if the neutral 3rd party knows in advance they are not a candidate for the job. 

@Mike Hurney also has a good point in that you might be best served waiting until you have the property in contract to get your estimates. Just make sure that you are still within your due diligence period and that your contingencies have not been waived. 

$30k is not an unreasonable amount of money to fix a place up, but here in California there is a distinct difference in remodel pricing between homeowners and investors. The same contractor may bid the job for us 30% lower than he would bid the job for a homeowner (and he will likely make the same money at the end of the job). The reason for this is that as an experienced investor we understand how pricing works and we have our scope of work, materials chosen, and all other decisions made before we start the project. All material is then delivered to the job exactly when it's needed and we don't make arbitrary changes during construction. This efficiency affords the contractor the ability to get the job done faster and with fewer resources than the typical homeowner who will require more time, attention, and changes along the way. 

The bottom line is that if you are able to work with a friend to get your scope of work ironed out before you start, you may be able to negotiate better pricing by showing the contractor that you can keep the job moving quickly. 

Good Luck!

I agree with @J Scott, we use QB for pure accounting and we duplicate the QB entries into Google spreadsheets so that our non-accounting team members can understand the data. 

Furthermore, that method allows us to keep all of the information pertaining to one property in one spreadsheet with the data spread out among 5-6 sheets. 

@Ibrahim Hughes - you are probably best off creating your own spreadsheet and just entering custom formulas. That way it will be tailored to your needs. Just use one cell to put the days you expect to hold the property, and then have all of the other formulas pull from that cell to calculate holding costs, for example, asssume X refers to the cell with the holding days set to 120:

Total interest expense = ([yearly interest] / 365) * X 

Total utilities expense = ([monthly avg] / 30) * X 

Total Property Tax = [[yearly tax] / 365) * X 

By using that method, if X changes and you hold the property for 150 days intead of 120, you only have to change one cell and all of the costs will update.

Hope that helps!

We have done many homes with foundation issues and some go better than others. By your use of the word "piers" i'm assuming it's a raised foundation, which is unusual for new construction. Raised foundations are much simpler to fix and a structural engineer can help pretty quickly. 

If the house is slab on grade, you'll have a bigger problem, and if you aren't all that experienced with these types of repairs, it's probably better to not make this deal. 

Installing 28 "pads" around a slab on grade foundation would be a plausible repair. The pads would work to shore up the foundation and then the existing foundation would tie into a grade beam that goes around the house. 

Either way, the only way to be sure if the fix was done correctly would be to obtain the geological survey that was used by the structural engineer to design the repair. If they did not obtain a geo survey and the repairs deteriorated this quickly...I just wouldn't touch it.