All Forum Posts by: Jim Goebel

@Mauricio A.

Yes, seems high.  What's your schedule?  You can do this, although probably not in a day.

I see no mention of repairing joists which means you'd be exposed to a possible change order if things went that direction.

Your scope isn't clear, by the way - the part about a pipe in the sub floor.  The subfloor is typically plywood, so I think you maybe means that the leak was below the sub floor, perhaps in crawlspace?

There may be a crew coming in, but yes seems high.  However, I will say to do this well (in one day) the contractor would have to be working extremely efficiently and no their way around this stuff.

@Don Konipol

So if I'm to understand, the most you could get out of that auction process would be the property, perhaps at a discount IF you don't get outbid.

However, if someone else outbids your initial bid, that extra money (relative to the balance) in no way goes to the note investor.  It would go to pay off the note investors balance (say if it was in first position), then it goes to junior lien holders, then finally, to the borrower?

Personally I'm confused why that extra money would go to the borrower.  

@Joshua Israel

Hi Joshua

This is a document that'll be application specific.  Of course people use them: they are the nuts and bolts of building mutual understanding of what needs to happen when you negotiate with a contractor.

Let's use flooring as an example.  Let's say you buy a house and you're getting towards the end of the rehab, and you're wanting to replace the floors.  Things in a scope of work might include:

Quality Expectations : Max gap between edges and walls

Attachment mechanism: If any adhesives, screws, etc would be used, essentially spelling out expectations for how the install will happen

Demo Responsibility: Perhaps you'd need to define if the contractor is responsible for removing the baseboard.

Haul Off/Clean up: Do you have your own hourly resources to clean up the job site or is that part of the contractors responsibility?

How the materials are getting to the job site

Site Access

Project Timeline and Draw Schedule

Those would be some of the basics there.  As you can see for something simple like a flooring project, these scopes get more and more detailed with more complex projects.  Much of the time a scope will include drawings detailing out what's happening/how.

@Andy Mirza

@Logan Hassinger

I was having a conversation with a friend and investor the other day, and he stated that there was some risk of getting 'wiped out' in a bankruptcy situation.  Is there any risk whatsoever of losing the entirity of one's principal investment in notes?

I'm not talking about fraud in investing with someone else, but rather, buying a note, and then - basically my question is what is the absolute worst case scenario?

@DEANDRE SEARCY

Well, it's always hard to say with out knowing the specifics of your job, however for materials and labor based on what you described, that doesn't sound bad at all.  I'd still think in terms of getting a few more quotes if you're not sure.

@Franky Aikens

Agree on early statements.  Get a good model where you don't depend on market timing.

That said, I think we're 75% at least of our way through the market cycle.  Who knows how long it takes to get that last quarter of the way through and really shake things out (or if it's a prolonged plateau)

@Zhuo Ye

They definitely work against it, but I'd say it's kind of a 10-20% adjustment in terms of quanity demand and possibly willingness to pay, in our market.  With a lot else going for a property, you'll still find a large number of folks that will look past it.  Modern houses bedrooms are way bigger for what it's worth, typically.

@Blake Wilson

Real estate development work is a little 'skinny' on the full time traditional career path ramps, especially mid career - it's really a form of hyper capitalism.  I do see postings for more of real estate development work, for organizations that have scaled and have the room/structure to bring that skill set in.  Certainly, project management skills are in high demand, for investors, the trick is that most investors want 1099 contractors because they are looking to develop investments, not be tied down with a bunch of W-2 commitments.

I wonder if you can just get yourself in a position to make that leap to be an investor, and use your PM skills while digging into a project?

@Leigh S.

Well we're biased as buy and hold investors, but the way to 'think' about this is: if you immediately sold and put that money elsewhere, what returns can you get on your invested money and how does that compare to your ROI on that sweet little BRRR?

Further, why sell if you can finance it and get 75% LTV back, then buy your next one and get another $300+ / mo in cash flow? You're missing one R from your BRRR :)

@David Weidemann

Welcome, David!