All Forum Posts by: Jean Paul Valley

So I know that for developing real estate there is pre-construction loan, bridge loan, and then permanent financing. My question is if a bank (or other lender) will provide one loan that includes all phases? Thanks for any help. 

So I am reviewing the different valuaitons used and have come across debt service. i am wondering what debt service includes, for example is it mortgage, taxes, interest, etc... or is it just mortgage principal?

For example, something like cash on cash return is calculated as remaining cash after debt service/cash investment. So whats the debt service? thanks. 

Definately focus on the debt load right now. Do you have a job lined up after residency? 200k for a first year associate sounds high,and 300k seems bonkers, but I am not in this field so maybe you are right. Do you have a guarantee that you will be making this salary? Schools are notorious for misleading employment statistics.

Good luck to you. I took some pro school debt so I know it can be tough. There will be plenty of time to invest once debts are down.

Thanks for the responses.

Mark, I am wondering why you recomend against building? I have only started my research but it looks like a lot of open lots in the seaside area due to the storm. My thought is to purchase the lot at a discount (say 20-25% less than advertised price if possible) then work with a local contractor or building company to put up the house. I like the build and rent scenario because then I know what I a buying. Let me know your thoughts on this.

Donte, I would love to get down to 20% if possible so thanks for the advice.

Also, to anyone familiar with renting in this area, how "bad" is the off season? Mark, you mentioned that you had trouble renting last year. Is that the norm. Most likely I will budget the home in a way that the summer should come close to making up mortgage. Even if I take a hit over the year, I will be happy coming close, as I see this area as a good value play.

Plus, I love the shore and want to be part of the rebuilding effort!

Wondering if anyone caN share their experience on vacation home rentals, specifically on the Shore, but any advice will do.

My background is that I own one rental home. Currently, I am researching the market for a second rental home. My preliminary plan is as follows:

build new home for roughly 600-650k within 2 blocks of shore.
rent at weekly for 2,500-3,500
drop down significantly for off season.
Some questions:
financing - is 30% down the norm for such properties? anyone know of scenarion where I can get away with 20%.
Off season - my concern is putting so much pressure on the summer months to make up the mortgage for the year. Given the shore locaiton, how unlikely is it that I get any off season tenants.
Rental agencies - im 2hrs from the shore so it may be best to use an agency to rent this out. How much do agencies eat into profit?
thanks for any and all advice.

There are no utilities hooked up to the lot. We will be putting in our own well, septic, propane heat.

The land owner already tested the well potential during the planning phase - this particular town demanded extensive tests, and everything came back ok. Would you recommend I hire out and conduct my own well inspection, or is a "certification of proper welling" from the developer suitable to cover my behind in case of future problems?

So, I firmed things up with the land developer and we will be able to purchase the lot directly from them. This will allow us to proceed with the build without any sales agents.

We have set up a meeting for early next week to put down the deposit and sign the purchase contract. Does anyone have any tips before we sign on for the land?

Thanks so much for all of your help!

My situation is this: I own a piece of property in a subdivision that will not allow me to use my own builder. I must chose from a list of 8 approved builders. I found the one I like but was told that they will use a real estate agent (and offered to have that agent double as my own for the sale). So, my question is this:

1. Why are we involving an agent at all? The builder and I will discuss the construction, my lawyer will and the builders lawyer will review all documents. So, why does anyone else need to make 7% on this deal for doing very little.

2. For a nominal fee, I can get a license myself in this state (I meet all prereq's). Is there any benefit to me acting as my own agent? I understand seller pays out the commission, so if an agent is forced into this deal can I then demand 3.5% of their commission? seems kinda jerk move, but I do like to save money.

Thanks for your help.

Thanks for the reply. So, if I have a general contractor overseeing the project, it is his/her liability? This makes sense as in that case it is the GC who is hiring the subs.

In the alternative, if I act as my own general contractor, I assume it is then up to me to have general liability, workers comp insurance, etc...?

My question is if I buy a piece of raw land with the intention of hiring my own architect/contractor to build and oversee, am I liable for any injuries that happen on the work site?

My second question is if I hire a traditional builder or developer to build on the lot which I own, am I better of from a liability standpoint to then deed the lot over to the builder (presumably so its on them if a worker is injured) and then have the property deeded back to me when done?

Thanks