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All Forum Posts by: Jess Hewitt

Jess Hewitt has started 3 posts and replied 56 times.

Post: real estate partnerships

Jess HewittPosted
  • Rental Property Investor
  • Houston, TX
  • Posts 64
  • Votes 29

That's a much better plan!

Post: real estate partnerships

Jess HewittPosted
  • Rental Property Investor
  • Houston, TX
  • Posts 64
  • Votes 29

Your strategy from a business point of view is fine but here's how I would structure it. I would put the investment into a LP or LLC to limit your liability from your boots on the ground guy, all accounting and banking should be handled on your end as you have the most to lose, I would keep a reserve for vacancies as there is a high risk that your partner will never kick in any money once he is cashed out on his mortgage, I would have the partner sign an option for you to buy his shares at a known value if he defaults or walks away and finally I would make sure that I had full financial and legal control of the property. No worries about the mortgage as the bank is happy as long as it gets its payments in full and on time. Good luck and keep us posted.

Post: Property Management Company Questions

Jess HewittPosted
  • Rental Property Investor
  • Houston, TX
  • Posts 64
  • Votes 29
Originally posted by @Candice Gold:

So, that answers my question then. I can own and run the property management company and have a broker sponsor me. I haven't decided if I will wait to do this until I get my brokers license or beforehand. I just wanted to see what my options were regarding it! Thanks.

 Also, please remember you must register your "Property Management Company" with the Texas Real Estate Commission, TREC.  There are many property management companies that are not TREC licensed and therefore no claims can be made against these companies run by licensed RE Salespersons or brokers.  Search your property management company licensing here, TREC Search and click here for business entity licensing information, BIZ License.  Here is also some advice for real estate investors, always check your RE Agent and their property management licenses, many are personally licensed but are not even aware of the requirement to license their businesses - stay far away from these companies and don't let the RE Agent pull the bait and switch by offering to personally manage your properties and then switch to an unknown and unlicensed entity.  I was scammed once and it will not happen again!

Post: General Contractors

Jess HewittPosted
  • Rental Property Investor
  • Houston, TX
  • Posts 64
  • Votes 29

All good comments.  I will recommend contractors but only when I know I will not be using them in the time period requested.  The other problem is not all contractors are consistent.  I recently recommended my best roofer and leak fixer for a project that would not interfere with my projects.  Now this guy is the best and has high quality work at above average prices.  He and the owner did not see eye to eye on the pace of the repairs (contractor is slow and plodding but will not quit until the job is done and perfect) and now I have two disgruntled parties who blame me.  

And in spite of all of the comments here - no one has recommended any contractors to you.

So, what's a guy to do when he needs contractors?  Here is my best advice.

Go to where they buy their supplies.  I found the roofer above when I had to replace roof damage after a hurricane.  The roof was a special fiber-based Spanish tile that had an installation manual that was voluminous.  I knew my regular roofers could not take the time needed for a proper installation.  I called the manufacturer of the tiles and got the names of the local suppliers, I called them and asked for the names of who they considered to be their most knowledgeable installers of the tiles.  I called these companies and hired one.  I have done this many times, especially when going into a new area where I have no contractors.

Second, ask your respected contractors.  I recently started renovations on 4 townhouses in a rural area where I had not one contractor.  I did know one electrician that has done commercial work for me nearby.  I asked who he would hire to work on his  rental houses and then I hired the people he recommended, then if I liked that contractor I asked him the same thing until I had a book full of names of quality contractors.  Of all people the landscaper was the best source of referrals!

It does not matter if you are looking for plumbers, carpenters, or landscapers - you can find the best where they go every day to buy supplies.

Post: General Contractors

Jess HewittPosted
  • Rental Property Investor
  • Houston, TX
  • Posts 64
  • Votes 29

If there is one thing that I have learned is that investors do not recommend their best contractors unless they know they will no longer need them.  Yes there are great contractors in Houston, will I recommend them to you?  Nope.

Post: Rehab with owner while he keeps title and then profit split

Jess HewittPosted
  • Rental Property Investor
  • Houston, TX
  • Posts 64
  • Votes 29

I learned this lesson the hard way when my "partner" home owner accepted a lower price than I was negotiating.  Here's the simple solution:  Buy an option for $10 for the price of the house at his value plus your investment plus half of the profit expected, sign and notarize and file a memorandum of option with the county.  Now if anyone checks you have an option on the property that anyone else has to clear before they can buy the property.  You can still have an agreement to split the profits but you keep control of the house until it is sold.  I thank Barney Zick for these and all ideas involving control of property, Barney has passed on but the RICH Club has most of his works in their library.

Post: Rehab with owner while he keeps title and then profit split

Jess HewittPosted
  • Rental Property Investor
  • Houston, TX
  • Posts 64
  • Votes 29
Originally posted by @Jimmy H.:

BP community,

I am currently working on a deal which the owner is a lot more interested in keeping the property (instead of selling as-is), and JV with me to rehab it and then split the profits after sale. A realistic ARV is at $500K - $525K or more, and rehab costs to get to that ARV is in the range of 75K-100K. I've already proposed to:

1.)  Buy it as-is for 325K so he'll be done with it and not having to worry about all the repairs and sale and the funds and risks associated, but he is most interested in partnering up and split the profit

2.)  For the option to profit split, I've proposed to have him owner-finance to me at the same 325K and take back a note for the deed as collateral, no interests and payments for 6 months while it is going under renovations and resale, and then profit split after

3.) His desire now is to keep the property without selling or transferring title to me and just JV with me to get it rehabbed and sell for profit splits.

I think he is steadfast in doing this deal according to No. 3 above.  Assuming that the numbers are agreeable and all contingencies (financially) are accounted for, what are the downsides of not having title to the property while doing the rehab?  Obviously a mechanical lien, or something similar, will be filed to protect my interest .... but I would like to know from the BP community if there are other things that I will need to consider in order for this to be mutually beneficial.

Post: Houston Investors

Jess HewittPosted
  • Rental Property Investor
  • Houston, TX
  • Posts 64
  • Votes 29

What makes an agent "investor friendly?"

Post: Title companies in Houston

Jess HewittPosted
  • Rental Property Investor
  • Houston, TX
  • Posts 64
  • Votes 29

Also Todd Taylor, Attorney with a title company, (713) 571-9000, tell him I sent you.

Post: Title companies in Houston

Jess HewittPosted
  • Rental Property Investor
  • Houston, TX
  • Posts 64
  • Votes 29

Try Post Oak Title, ask for Alladin, (713) 622-7300, tell him I sent you.